Correlation Between JLEN Environmental and Polar Capital
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Polar 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 Polar 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 Polar Capital Technology, you can compare the effects of market volatilities on JLEN Environmental and Polar 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Polar Capital.
Diversification Opportunities for JLEN Environmental and Polar Capital
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JLEN and Polar is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Polar Capital go up and down completely randomly.
Pair Corralation between JLEN Environmental and Polar Capital
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Polar Capital. But the stock apears to be less risky and, when comparing its historical volatility, JLEN Environmental Assets is 1.1 times less risky than Polar Capital. The stock trades about -0.25 of its potential returns per unit of risk. The Polar Capital Technology is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 29,600 in Polar Capital Technology on August 30, 2024 and sell it today you would earn a total of 3,850 from holding Polar Capital Technology or generate 13.01% 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. Polar Capital Technology
Performance |
| Timeline |
| JLEN Environmental Assets |
| Polar Capital Technology |
JLEN Environmental and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Polar Capital
The main advantage of trading using opposite JLEN Environmental and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Polar 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| JLEN Environmental vs. Playtech Plc | JLEN Environmental vs. Raytheon Technologies Corp | JLEN Environmental vs. Uber Technologies | JLEN Environmental vs. Worldwide Healthcare Trust |
| Polar Capital vs. Monster Beverage Corp | Polar Capital vs. Sparebank 1 SR | Polar Capital vs. National Beverage Corp | Polar Capital vs. Taiwan Semiconductor Manufacturing |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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