Correlation Between JLEN Environmental and X FAB
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on JLEN Environmental and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and X FAB.
Diversification Opportunities for JLEN Environmental and X FAB
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JLEN and 0ROZ is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and X FAB go up and down completely randomly.
Pair Corralation between JLEN Environmental and X FAB
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the X FAB. But the stock apears to be less risky and, when comparing its historical volatility, JLEN Environmental Assets is 1.76 times less risky than X FAB. The stock trades about -0.05 of its potential returns per unit of risk. The X FAB Silicon Foundries is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 659.00 in X FAB Silicon Foundries on September 2, 2024 and sell it today you would lose (223.00) from holding X FAB Silicon Foundries or give up 33.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.42% |
| Values | Daily Returns |
JLEN Environmental Assets vs. X FAB Silicon Foundries
Performance |
| Timeline |
| JLEN Environmental Assets |
| X FAB Silicon |
JLEN Environmental and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and X FAB
The main advantage of trading using opposite JLEN Environmental and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB'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 |
| X FAB vs. Uniper SE | X FAB vs. Mulberry Group PLC | X FAB vs. London Security Plc | X FAB 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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