Correlation Between JLEN Environmental and Central Asia
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Central Asia 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 Central Asia 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 Central Asia Metals, you can compare the effects of market volatilities on JLEN Environmental and Central Asia 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 Central Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Central Asia.
Diversification Opportunities for JLEN Environmental and Central Asia
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JLEN and Central is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Central Asia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Asia Metals 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 Central Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Asia Metals has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Central Asia go up and down completely randomly.
Pair Corralation between JLEN Environmental and Central Asia
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to generate 1.59 times more return on investment than Central Asia. However, JLEN Environmental is 1.59 times more volatile than Central Asia Metals. It trades about -0.22 of its potential returns per unit of risk. Central Asia Metals is currently generating about -0.4 per unit of risk. If you would invest 8,530 in JLEN Environmental Assets on August 24, 2024 and sell it today you would lose (770.00) from holding JLEN Environmental Assets or give up 9.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Central Asia Metals
Performance |
| Timeline |
| JLEN Environmental Assets |
| Central Asia Metals |
JLEN Environmental and Central Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Central Asia
The main advantage of trading using opposite JLEN Environmental and Central Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Central Asia 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 Central Asia will offset losses from the drop in Central Asia's long position.| JLEN Environmental vs. DXC Technology Co | JLEN Environmental vs. Allianz Technology Trust | JLEN Environmental vs. Ocean Harvest Technology | JLEN Environmental vs. Charter Communications Cl |
| Central Asia vs. Coor Service Management | Central Asia vs. Sancus Lending Group | Central Asia vs. Aeorema Communications Plc | Central Asia vs. JLEN Environmental Assets |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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