Correlation Between JLEN Environmental and Nippon Active
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Nippon Active 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 Nippon Active 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 Nippon Active Value, you can compare the effects of market volatilities on JLEN Environmental and Nippon Active 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 Nippon Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Nippon Active.
Diversification Opportunities for JLEN Environmental and Nippon Active
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JLEN and Nippon is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Nippon Active Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Active Value 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 Nippon Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Active Value has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Nippon Active go up and down completely randomly.
Pair Corralation between JLEN Environmental and Nippon Active
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Nippon Active. In addition to that, JLEN Environmental is 1.88 times more volatile than Nippon Active Value. It trades about -0.26 of its total potential returns per unit of risk. Nippon Active Value is currently generating about 0.07 per unit of volatility. If you would invest 18,025 in Nippon Active Value on September 25, 2024 and sell it today you would earn a total of 475.00 from holding Nippon Active Value or generate 2.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Nippon Active Value
Performance |
| Timeline |
| JLEN Environmental Assets |
| Nippon Active Value |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JLEN Environmental and Nippon Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Nippon Active
The main advantage of trading using opposite JLEN Environmental and Nippon Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Nippon Active 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 Nippon Active will offset losses from the drop in Nippon Active's long position.| JLEN Environmental vs. BioNTech SE | JLEN Environmental vs. TechnipFMC PLC | JLEN Environmental vs. L3Harris Technologies | JLEN Environmental vs. Scandinavian Tobacco Group |
| Nippon Active vs. Infrastrutture Wireless Italiane | Nippon Active vs. Ecofin Global Utilities | Nippon Active vs. Vienna Insurance Group | Nippon Active vs. United Utilities Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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