Correlation Between JE Cleantech and Watts Water
Can any of the company-specific risk be diversified away by investing in both JE Cleantech and Watts Water 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 JE Cleantech and Watts Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JE Cleantech Holdings and Watts Water Technologies, you can compare the effects of market volatilities on JE Cleantech and Watts Water 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 JE Cleantech with a short position of Watts Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of JE Cleantech and Watts Water.
Diversification Opportunities for JE Cleantech and Watts Water
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between JCSE and Watts is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding JE Cleantech Holdings and Watts Water Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Watts Water Technologies and JE Cleantech 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 JE Cleantech Holdings are associated (or correlated) with Watts Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Watts Water Technologies has no effect on the direction of JE Cleantech i.e., JE Cleantech and Watts Water go up and down completely randomly.
Pair Corralation between JE Cleantech and Watts Water
Given the investment horizon of 90 days JE Cleantech Holdings is expected to generate 6.34 times more return on investment than Watts Water. However, JE Cleantech is 6.34 times more volatile than Watts Water Technologies. It trades about 0.11 of its potential returns per unit of risk. Watts Water Technologies is currently generating about 0.23 per unit of risk. If you would invest 140.00 in JE Cleantech Holdings on September 5, 2024 and sell it today you would earn a total of 25.00 from holding JE Cleantech Holdings or generate 17.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JE Cleantech Holdings vs. Watts Water Technologies
Performance |
| Timeline |
| JE Cleantech Holdings |
| Watts Water Technologies |
JE Cleantech and Watts Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JE Cleantech and Watts Water
The main advantage of trading using opposite JE Cleantech and Watts Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JE Cleantech position performs unexpectedly, Watts Water 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 Watts Water will offset losses from the drop in Watts Water's long position.| JE Cleantech vs. Laser Photonics | JE Cleantech vs. Siemens AG Class | JE Cleantech vs. ATVRockN | JE Cleantech vs. Nuburu Inc |
| Watts Water vs. Laser Photonics | Watts Water vs. Siemens AG Class | Watts Water vs. ATVRockN | Watts Water vs. Nuburu Inc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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