Correlation Between JLEN Environmental and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Gamma Communications 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 Gamma Communications 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 Gamma Communications PLC, you can compare the effects of market volatilities on JLEN Environmental and Gamma Communications 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 Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Gamma Communications.
Diversification Opportunities for JLEN Environmental and Gamma Communications
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JLEN and Gamma is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Gamma Communications PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications PLC has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Gamma Communications go up and down completely randomly.
Pair Corralation between JLEN Environmental and Gamma Communications
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Gamma Communications. But the stock apears to be less risky and, when comparing its historical volatility, JLEN Environmental Assets is 1.07 times less risky than Gamma Communications. The stock trades about -0.06 of its potential returns per unit of risk. The Gamma Communications PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 114,072 in Gamma Communications PLC on November 7, 2024 and sell it today you would earn a total of 22,128 from holding Gamma Communications PLC or generate 19.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Gamma Communications PLC
Performance |
| Timeline |
| JLEN Environmental Assets |
| Gamma Communications PLC |
JLEN Environmental and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Gamma Communications
The main advantage of trading using opposite JLEN Environmental and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| JLEN Environmental vs. Golden Metal Resources | JLEN Environmental vs. Gamma Communications PLC | JLEN Environmental vs. URU Metals | JLEN Environmental vs. Aeorema Communications Plc |
| Gamma Communications vs. Eastman Chemical Co | Gamma Communications vs. Scandinavian Tobacco Group | Gamma Communications vs. AfriTin Mining | Gamma Communications vs. McEwen Mining |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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