Correlation Between Fras Le and JSL SA
Can any of the company-specific risk be diversified away by investing in both Fras Le and JSL SA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fras Le and JSL SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fras le SA and JSL SA, you can compare the effects of market volatilities on Fras Le and JSL SA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fras Le with a short position of JSL SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fras Le and JSL SA.
Diversification Opportunities for Fras Le and JSL SA
Excellent diversification
The 3 months correlation between Fras and JSL is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fras le SA and JSL SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSL SA and Fras Le is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fras le SA are associated (or correlated) with JSL SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSL SA has no effect on the direction of Fras Le i.e., Fras Le and JSL SA go up and down completely randomly.
Pair Corralation between Fras Le and JSL SA
Assuming the 90 days trading horizon Fras le SA is expected to generate 0.59 times more return on investment than JSL SA. However, Fras le SA is 1.69 times less risky than JSL SA. It trades about 0.1 of its potential returns per unit of risk. JSL SA is currently generating about 0.03 per unit of risk. If you would invest 1,013 in Fras le SA on August 27, 2024 and sell it today you would earn a total of 1,052 from holding Fras le SA or generate 103.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fras le SA vs. JSL SA
Performance |
| Timeline |
| Fras le SA |
| JSL SA |
Fras Le and JSL SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fras Le and JSL SA
The main advantage of trading using opposite Fras Le and JSL SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fras Le position performs unexpectedly, JSL SA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in JSL SA will offset losses from the drop in JSL SA's long position.| Fras Le vs. Baidu Inc | Fras Le vs. Deutsche Bank Aktiengesellschaft | Fras Le vs. HSBC Holdings plc | Fras Le vs. The Bank of |
| JSL SA vs. METISA Metalrgica Timboense | JSL SA vs. Lupatech SA | JSL SA vs. Recrusul SA | JSL SA vs. Fras le SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
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