Correlation Between JLEN Environmental and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Litigation Capital 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 Litigation Capital 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 Litigation Capital Management, you can compare the effects of market volatilities on JLEN Environmental and Litigation Capital 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 Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Litigation Capital.
Diversification Opportunities for JLEN Environmental and Litigation Capital
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JLEN and Litigation is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital 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 Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Litigation Capital go up and down completely randomly.
Pair Corralation between JLEN Environmental and Litigation Capital
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Litigation Capital. But the stock apears to be less risky and, when comparing its historical volatility, JLEN Environmental Assets is 1.88 times less risky than Litigation Capital. The stock trades about -0.05 of its potential returns per unit of risk. The Litigation Capital Management is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,643 in Litigation Capital Management on August 27, 2024 and sell it today you would earn a total of 4,932 from holding Litigation Capital Management or generate 74.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Litigation Capital Management
Performance |
| Timeline |
| JLEN Environmental Assets |
| Litigation Capital |
JLEN Environmental and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Litigation Capital
The main advantage of trading using opposite JLEN Environmental and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Litigation Capital 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 Litigation Capital will offset losses from the drop in Litigation Capital's long position.| JLEN Environmental vs. Samsung Electronics Co | JLEN Environmental vs. Samsung Electronics Co | JLEN Environmental vs. Hyundai Motor | JLEN Environmental vs. Toyota Motor Corp |
| Litigation Capital vs. Catalyst Media Group | Litigation Capital vs. Oncimmune Holdings plc | Litigation Capital vs. Invesco Health Care | Litigation Capital vs. Coor Service Management |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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