Correlation Between JLEN Environmental and Bloomsbury Publishing
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Bloomsbury Publishing 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 Bloomsbury Publishing 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 Bloomsbury Publishing Plc, you can compare the effects of market volatilities on JLEN Environmental and Bloomsbury Publishing 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 Bloomsbury Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Bloomsbury Publishing.
Diversification Opportunities for JLEN Environmental and Bloomsbury Publishing
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between JLEN and Bloomsbury is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Bloomsbury Publishing Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomsbury Publishing Plc 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 Bloomsbury Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomsbury Publishing Plc has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Bloomsbury Publishing go up and down completely randomly.
Pair Corralation between JLEN Environmental and Bloomsbury Publishing
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to generate 1.13 times more return on investment than Bloomsbury Publishing. However, JLEN Environmental is 1.13 times more volatile than Bloomsbury Publishing Plc. It trades about -0.04 of its potential returns per unit of risk. Bloomsbury Publishing Plc is currently generating about -0.13 per unit of risk. If you would invest 7,690 in JLEN Environmental Assets on October 10, 2024 and sell it today you would lose (130.00) from holding JLEN Environmental Assets or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Bloomsbury Publishing Plc
Performance |
| Timeline |
| JLEN Environmental Assets |
| Bloomsbury Publishing Plc |
JLEN Environmental and Bloomsbury Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Bloomsbury Publishing
The main advantage of trading using opposite JLEN Environmental and Bloomsbury Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Bloomsbury Publishing 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 Bloomsbury Publishing will offset losses from the drop in Bloomsbury Publishing's long position.| JLEN Environmental vs. Pressure Technologies Plc | JLEN Environmental vs. Air Products Chemicals | JLEN Environmental vs. Beazer Homes USA | JLEN Environmental vs. Micron Technology |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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