Correlation Between Jensen Global and The Jensen
Can any of the company-specific risk be diversified away by investing in both Jensen Global and The 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 Jensen Global and The Jensen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jensen Global Quality and The Jensen Portfolio, you can compare the effects of market volatilities on Jensen Global and The 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 Jensen Global with a short position of The Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jensen Global and The Jensen.
Diversification Opportunities for Jensen Global and The Jensen
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jensen and The is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Jensen Global Quality and The Jensen Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Portfolio and Jensen Global 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 Jensen Global Quality are associated (or correlated) with The 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 Portfolio has no effect on the direction of Jensen Global i.e., Jensen Global and The Jensen go up and down completely randomly.
Pair Corralation between Jensen Global and The Jensen
Assuming the 90 days horizon Jensen Global Quality is expected to generate 0.81 times more return on investment than The Jensen. However, Jensen Global Quality is 1.24 times less risky than The Jensen. It trades about 0.06 of its potential returns per unit of risk. The Jensen Portfolio is currently generating about 0.01 per unit of risk. If you would invest 1,357 in Jensen Global Quality on August 26, 2024 and sell it today you would earn a total of 335.00 from holding Jensen Global Quality or generate 24.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jensen Global Quality vs. The Jensen Portfolio
Performance |
| Timeline |
| Jensen Global Quality |
| Jensen Portfolio |
Jensen Global and The Jensen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jensen Global and The Jensen
The main advantage of trading using opposite Jensen Global and The Jensen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jensen Global position performs unexpectedly, The 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 The Jensen will offset losses from the drop in The Jensen's long position.| Jensen Global vs. The Jensen Portfolio | Jensen Global vs. The Jensen Portfolio | Jensen Global vs. The Jensen Portfolio | Jensen Global vs. The Jensen Portfolio |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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