Correlation Between JLEN Environmental and Target Healthcare
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Target Healthcare 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 Target Healthcare 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 Target Healthcare REIT, you can compare the effects of market volatilities on JLEN Environmental and Target Healthcare 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 Target Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Target Healthcare.
Diversification Opportunities for JLEN Environmental and Target Healthcare
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JLEN and Target is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Target Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Healthcare REIT 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 Target Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Healthcare REIT has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Target Healthcare go up and down completely randomly.
Pair Corralation between JLEN Environmental and Target Healthcare
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Target Healthcare. In addition to that, JLEN Environmental is 1.38 times more volatile than Target Healthcare REIT. It trades about -0.2 of its total potential returns per unit of risk. Target Healthcare REIT is currently generating about -0.11 per unit of volatility. If you would invest 8,310 in Target Healthcare REIT on October 28, 2024 and sell it today you would lose (270.00) from holding Target Healthcare REIT or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Target Healthcare REIT
Performance |
| Timeline |
| JLEN Environmental Assets |
| Target Healthcare REIT |
JLEN Environmental and Target Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Target Healthcare
The main advantage of trading using opposite JLEN Environmental and Target Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Target Healthcare 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 Target Healthcare will offset losses from the drop in Target Healthcare's long position.| JLEN Environmental vs. CVR Energy | JLEN Environmental vs. Viridian Therapeutics | JLEN Environmental vs. Nationwide Building Society | JLEN Environmental vs. Digital Realty Trust |
| Target Healthcare vs. Fevertree Drinks Plc | Target Healthcare vs. Naturhouse Health SA | Target Healthcare vs. Dalata Hotel Group | Target Healthcare vs. Universal Health Services |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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