Correlation Between JLEN Environmental and Metals Exploration
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Metals Exploration 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 Metals Exploration 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 Metals Exploration Plc, you can compare the effects of market volatilities on JLEN Environmental and Metals Exploration 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 Metals Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Metals Exploration.
Diversification Opportunities for JLEN Environmental and Metals Exploration
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JLEN and Metals is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Metals Exploration Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Exploration 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 Metals Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Exploration Plc has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Metals Exploration go up and down completely randomly.
Pair Corralation between JLEN Environmental and Metals Exploration
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Metals Exploration. But the stock apears to be less risky and, when comparing its historical volatility, JLEN Environmental Assets is 2.94 times less risky than Metals Exploration. The stock trades about -0.05 of its potential returns per unit of risk. The Metals Exploration Plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 155.00 in Metals Exploration Plc on August 27, 2024 and sell it today you would earn a total of 420.00 from holding Metals Exploration Plc or generate 270.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Metals Exploration Plc
Performance |
| Timeline |
| JLEN Environmental Assets |
| Metals Exploration Plc |
JLEN Environmental and Metals Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Metals Exploration
The main advantage of trading using opposite JLEN Environmental and Metals Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Metals Exploration 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 Metals Exploration will offset losses from the drop in Metals Exploration'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 |
| Metals Exploration vs. Givaudan SA | Metals Exploration vs. Antofagasta PLC | Metals Exploration vs. Centamin PLC | Metals Exploration vs. Atalaya 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 Stocks Directory module to find actively traded stocks across global markets.
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