Correlation Between JLEN Environmental and Seche Environnement
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Seche Environnement 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 Seche Environnement 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 Seche Environnement SA, you can compare the effects of market volatilities on JLEN Environmental and Seche Environnement 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 Seche Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Seche Environnement.
Diversification Opportunities for JLEN Environmental and Seche Environnement
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JLEN and Seche is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Seche Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seche Environnement 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 Seche Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seche Environnement has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Seche Environnement go up and down completely randomly.
Pair Corralation between JLEN Environmental and Seche Environnement
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Seche Environnement. But the stock apears to be less risky and, when comparing its historical volatility, JLEN Environmental Assets is 1.01 times less risky than Seche Environnement. The stock trades about -0.25 of its potential returns per unit of risk. The Seche Environnement SA is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 9,030 in Seche Environnement SA on September 2, 2024 and sell it today you would lose (830.00) from holding Seche Environnement SA or give up 9.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Seche Environnement SA
Performance |
| Timeline |
| JLEN Environmental Assets |
| Seche Environnement |
JLEN Environmental and Seche Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Seche Environnement
The main advantage of trading using opposite JLEN Environmental and Seche Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Seche Environnement 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 Seche Environnement will offset losses from the drop in Seche Environnement'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 |
| Seche Environnement vs. Uniper SE | Seche Environnement vs. Mulberry Group PLC | Seche Environnement vs. London Security Plc | Seche Environnement 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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