Correlation Between JLEN Environmental and Extra Space
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Extra Space 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 JLEN Environmental and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JLEN Environmental Assets and Extra Space Storage, you can compare the effects of market volatilities on JLEN Environmental and Extra Space 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 JLEN Environmental with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Extra Space.
Diversification Opportunities for JLEN Environmental and Extra Space
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JLEN and Extra is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Extra Space Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extra Space Storage and JLEN Environmental 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 JLEN Environmental Assets are associated (or correlated) with Extra Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extra Space Storage has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Extra Space go up and down completely randomly.
Pair Corralation between JLEN Environmental and Extra Space
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Extra Space. In addition to that, JLEN Environmental is 1.07 times more volatile than Extra Space Storage. It trades about -0.25 of its total potential returns per unit of risk. Extra Space Storage is currently generating about 0.16 per unit of volatility. If you would invest 16,191 in Extra Space Storage on September 2, 2024 and sell it today you would earn a total of 1,034 from holding Extra Space Storage or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Extra Space Storage
Performance |
| Timeline |
| JLEN Environmental Assets |
| Extra Space Storage |
JLEN Environmental and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Extra Space
The main advantage of trading using opposite JLEN Environmental and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Extra Space 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 Extra Space will offset losses from the drop in Extra Space's long position.| JLEN Environmental vs. Samsung Electronics Co | JLEN Environmental vs. Samsung Electronics Co | JLEN Environmental vs. Toyota Motor Corp | JLEN Environmental vs. Reliance Industries Ltd |
| Extra Space vs. Uniper SE | Extra Space vs. Mulberry Group PLC | Extra Space vs. London Security Plc | Extra Space vs. Triad Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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