Correlation Between JLEN Environmental and Ross Stores
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on JLEN Environmental and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Ross Stores.
Diversification Opportunities for JLEN Environmental and Ross Stores
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JLEN and Ross is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Ross Stores go up and down completely randomly.
Pair Corralation between JLEN Environmental and Ross Stores
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Ross Stores. But the stock apears to be less risky and, when comparing its historical volatility, JLEN Environmental Assets is 1.08 times less risky than Ross Stores. The stock trades about -0.25 of its potential returns per unit of risk. The Ross Stores is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 14,920 in Ross Stores on August 30, 2024 and sell it today you would earn a total of 628.00 from holding Ross Stores or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Ross Stores
Performance |
| Timeline |
| JLEN Environmental Assets |
| Ross Stores |
JLEN Environmental and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Ross Stores
The main advantage of trading using opposite JLEN Environmental and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| JLEN Environmental vs. Playtech Plc | JLEN Environmental vs. Raytheon Technologies Corp | JLEN Environmental vs. Uber Technologies | JLEN Environmental vs. Worldwide Healthcare Trust |
| Ross Stores vs. Centaur Media | Ross Stores vs. Everyman Media Group | Ross Stores vs. bet at home AG | Ross Stores vs. MediaZest 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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