Correlation Between J Long and LKQ
Can any of the company-specific risk be diversified away by investing in both J Long and LKQ 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 J Long and LKQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Long Group Limited and LKQ Corporation, you can compare the effects of market volatilities on J Long and LKQ 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 J Long with a short position of LKQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Long and LKQ.
Diversification Opportunities for J Long and LKQ
Very good diversification
The 3 months correlation between J Long and LKQ is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited and LKQ Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LKQ Corporation and J Long 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 J Long Group Limited are associated (or correlated) with LKQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LKQ Corporation has no effect on the direction of J Long i.e., J Long and LKQ go up and down completely randomly.
Pair Corralation between J Long and LKQ
Allowing for the 90-day total investment horizon J Long Group Limited is expected to under-perform the LKQ. In addition to that, J Long is 15.83 times more volatile than LKQ Corporation. It trades about -0.01 of its total potential returns per unit of risk. LKQ Corporation is currently generating about 0.04 per unit of volatility. If you would invest 3,749 in LKQ Corporation on August 24, 2024 and sell it today you would earn a total of 39.00 from holding LKQ Corporation or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Long Group Limited vs. LKQ Corp.
Performance |
| Timeline |
| J Long Group |
| LKQ Corporation |
J Long and LKQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Long and LKQ
The main advantage of trading using opposite J Long and LKQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Long position performs unexpectedly, LKQ 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 LKQ will offset losses from the drop in LKQ's long position.| J Long vs. Ralph Lauren Corp | J Long vs. Under Armour C | J Long vs. Vince Holding Corp | J Long vs. Figs 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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