Correlation Between JLEN Environmental and Weiss Korea
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Weiss Korea 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 Weiss Korea 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 Weiss Korea Opportunity, you can compare the effects of market volatilities on JLEN Environmental and Weiss Korea 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 Weiss Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Weiss Korea.
Diversification Opportunities for JLEN Environmental and Weiss Korea
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JLEN and Weiss is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Weiss Korea Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiss Korea Opportunity 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 Weiss Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiss Korea Opportunity has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Weiss Korea go up and down completely randomly.
Pair Corralation between JLEN Environmental and Weiss Korea
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to generate 0.7 times more return on investment than Weiss Korea. However, JLEN Environmental Assets is 1.44 times less risky than Weiss Korea. It trades about -0.16 of its potential returns per unit of risk. Weiss Korea Opportunity is currently generating about -0.24 per unit of risk. If you would invest 7,640 in JLEN Environmental Assets on September 17, 2024 and sell it today you would lose (340.00) from holding JLEN Environmental Assets or give up 4.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Weiss Korea Opportunity
Performance |
| Timeline |
| JLEN Environmental Assets |
| Weiss Korea Opportunity |
JLEN Environmental and Weiss Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Weiss Korea
The main advantage of trading using opposite JLEN Environmental and Weiss Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental position performs unexpectedly, Weiss Korea 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 Weiss Korea will offset losses from the drop in Weiss Korea's long position.| JLEN Environmental vs. Bisichi Mining PLC | JLEN Environmental vs. Anglesey Mining | JLEN Environmental vs. Zoom Video Communications | JLEN Environmental vs. Blackrock World Mining |
| Weiss Korea vs. Federal Realty Investment | Weiss Korea vs. Verizon Communications | Weiss Korea vs. Smithson Investment Trust | Weiss Korea vs. JLEN Environmental Assets |
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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