Correlation Between Immobel and Jensen
Can any of the company-specific risk be diversified away by investing in both Immobel and Jensen 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 Immobel and Jensen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Immobel and Jensen Group, you can compare the effects of market volatilities on Immobel and Jensen 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 Immobel with a short position of Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immobel and Jensen.
Diversification Opportunities for Immobel and Jensen
Significant diversification
The 3 months correlation between Immobel and Jensen is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Immobel and Jensen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Group and Immobel 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 Immobel are associated (or correlated) with Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Group has no effect on the direction of Immobel i.e., Immobel and Jensen go up and down completely randomly.
Pair Corralation between Immobel and Jensen
Assuming the 90 days trading horizon Immobel is expected to under-perform the Jensen. But the stock apears to be less risky and, when comparing its historical volatility, Immobel is 1.45 times less risky than Jensen. The stock trades about -0.36 of its potential returns per unit of risk. The Jensen Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,190 in Jensen Group on September 4, 2024 and sell it today you would lose (30.00) from holding Jensen Group or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Immobel vs. Jensen Group
Performance |
| Timeline |
| Immobel |
| Jensen Group |
Immobel and Jensen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Immobel and Jensen
The main advantage of trading using opposite Immobel and Jensen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immobel position performs unexpectedly, Jensen 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 Jensen will offset losses from the drop in Jensen's long position.The idea behind Immobel and Jensen Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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