Correlation Between JLEN Environmental and Auto Trader
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Auto Trader 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 Auto Trader 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 Auto Trader Group, you can compare the effects of market volatilities on JLEN Environmental and Auto Trader 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 Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Auto Trader.
Diversification Opportunities for JLEN Environmental and Auto Trader
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JLEN and Auto is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group 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 Auto Trader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auto Trader Group has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Auto Trader go up and down completely randomly.
Pair Corralation between JLEN Environmental and Auto Trader
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Auto Trader. In addition to that, JLEN Environmental is 1.15 times more volatile than Auto Trader Group. It trades about -0.16 of its total potential returns per unit of risk. Auto Trader Group is currently generating about 0.02 per unit of volatility. If you would invest 77,878 in Auto Trader Group on November 4, 2024 and sell it today you would earn a total of 1,162 from holding Auto Trader Group or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Auto Trader Group
Performance |
| Timeline |
| JLEN Environmental Assets |
| Auto Trader Group |
JLEN Environmental and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Auto Trader
The main advantage of trading using opposite JLEN Environmental and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Auto Trader 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 Auto Trader will offset losses from the drop in Auto Trader's long position.| JLEN Environmental vs. Universal Health Services | JLEN Environmental vs. Scandic Hotels Group | JLEN Environmental vs. Primary Health Properties | JLEN Environmental vs. MyHealthChecked Plc |
| Auto Trader vs. Cairo Communication SpA | Auto Trader vs. Spirent Communications plc | Auto Trader vs. Melia Hotels | Auto Trader vs. Mobile Tornado Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |