Correlation Between JLEN Environmental and Vulcan Materials
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Vulcan Materials 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 Vulcan Materials 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 Vulcan Materials Co, you can compare the effects of market volatilities on JLEN Environmental and Vulcan Materials 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 Vulcan Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Vulcan Materials.
Diversification Opportunities for JLEN Environmental and Vulcan Materials
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JLEN and Vulcan is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Vulcan Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials 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 Vulcan Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Materials has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Vulcan Materials go up and down completely randomly.
Pair Corralation between JLEN Environmental and Vulcan Materials
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Vulcan Materials. But the stock apears to be less risky and, when comparing its historical volatility, JLEN Environmental Assets is 1.33 times less risky than Vulcan Materials. The stock trades about -0.24 of its potential returns per unit of risk. The Vulcan Materials Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 24,457 in Vulcan Materials Co on September 2, 2024 and sell it today you would earn a total of 4,329 from holding Vulcan Materials Co or generate 17.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.48% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Vulcan Materials Co
Performance |
| Timeline |
| JLEN Environmental Assets |
| Vulcan Materials |
JLEN Environmental and Vulcan Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Vulcan Materials
The main advantage of trading using opposite JLEN Environmental and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Vulcan Materials 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 Vulcan Materials will offset losses from the drop in Vulcan Materials' 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 |
| Vulcan Materials vs. Uniper SE | Vulcan Materials vs. Mulberry Group PLC | Vulcan Materials vs. London Security Plc | Vulcan Materials 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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