Correlation Between Jeld Wen and NexteGO NV
Can any of the company-specific risk be diversified away by investing in both Jeld Wen and NexteGO NV 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 Jeld Wen and NexteGO NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeld Wen Holding and NexteGO NV Ordinary, you can compare the effects of market volatilities on Jeld Wen and NexteGO NV 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 Jeld Wen with a short position of NexteGO NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeld Wen and NexteGO NV.
Diversification Opportunities for Jeld Wen and NexteGO NV
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jeld and NexteGO is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Jeld Wen Holding and NexteGO NV Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexteGO NV Ordinary and Jeld Wen 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 Jeld Wen Holding are associated (or correlated) with NexteGO NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexteGO NV Ordinary has no effect on the direction of Jeld Wen i.e., Jeld Wen and NexteGO NV go up and down completely randomly.
Pair Corralation between Jeld Wen and NexteGO NV
Given the investment horizon of 90 days Jeld Wen Holding is expected to generate 0.27 times more return on investment than NexteGO NV. However, Jeld Wen Holding is 3.65 times less risky than NexteGO NV. It trades about -0.12 of its potential returns per unit of risk. NexteGO NV Ordinary is currently generating about -0.32 per unit of risk. If you would invest 1,416 in Jeld Wen Holding on September 1, 2024 and sell it today you would lose (327.00) from holding Jeld Wen Holding or give up 23.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Jeld Wen Holding vs. NexteGO NV Ordinary
Performance |
| Timeline |
| Jeld Wen Holding |
| NexteGO NV Ordinary |
Jeld Wen and NexteGO NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeld Wen and NexteGO NV
The main advantage of trading using opposite Jeld Wen and NexteGO NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeld Wen position performs unexpectedly, NexteGO NV 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 NexteGO NV will offset losses from the drop in NexteGO NV's long position.| Jeld Wen vs. Trex Company | Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Apogee Enterprises | Jeld Wen vs. Travis Perkins PLC |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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