Correlation Between JLEN Environmental and Unilever PLC
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Unilever PLC 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 Unilever PLC 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 Unilever PLC, you can compare the effects of market volatilities on JLEN Environmental and Unilever PLC 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 Unilever PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Unilever PLC.
Diversification Opportunities for JLEN Environmental and Unilever PLC
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JLEN and Unilever is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Unilever PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever 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 Unilever PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever PLC has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Unilever PLC go up and down completely randomly.
Pair Corralation between JLEN Environmental and Unilever PLC
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Unilever PLC. In addition to that, JLEN Environmental is 1.52 times more volatile than Unilever PLC. It trades about -0.25 of its total potential returns per unit of risk. Unilever PLC is currently generating about -0.08 per unit of volatility. If you would invest 491,855 in Unilever PLC on September 3, 2024 and sell it today you would lose (21,755) from holding Unilever PLC or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Unilever PLC
Performance |
| Timeline |
| JLEN Environmental Assets |
| Unilever PLC |
JLEN Environmental and Unilever PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Unilever PLC
The main advantage of trading using opposite JLEN Environmental and Unilever PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Unilever PLC 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 Unilever PLC will offset losses from the drop in Unilever PLC's long position.| JLEN Environmental vs. Datagroup SE | JLEN Environmental vs. BW Offshore | JLEN Environmental vs. Monks Investment Trust | JLEN Environmental vs. Schroders Investment Trusts |
| Unilever PLC vs. Blackstone Loan Financing | Unilever PLC vs. Seche Environnement SA | Unilever PLC vs. JLEN Environmental Assets | Unilever PLC vs. Ebro Foods |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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