Correlation Between Premier Foods and JLEN Environmental
Can any of the company-specific risk be diversified away by investing in both Premier Foods and JLEN Environmental 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 Premier Foods and JLEN Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Foods PLC and JLEN Environmental Assets, you can compare the effects of market volatilities on Premier Foods and JLEN Environmental 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 Premier Foods with a short position of JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Foods and JLEN Environmental.
Diversification Opportunities for Premier Foods and JLEN Environmental
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Premier and JLEN is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Premier Foods PLC and JLEN Environmental Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLEN Environmental Assets and Premier Foods 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 Premier Foods PLC are associated (or correlated) with JLEN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLEN Environmental Assets has no effect on the direction of Premier Foods i.e., Premier Foods and JLEN Environmental go up and down completely randomly.
Pair Corralation between Premier Foods and JLEN Environmental
Assuming the 90 days trading horizon Premier Foods PLC is expected to generate 1.07 times more return on investment than JLEN Environmental. However, Premier Foods is 1.07 times more volatile than JLEN Environmental Assets. It trades about 0.03 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.04 per unit of risk. If you would invest 18,780 in Premier Foods PLC on September 14, 2024 and sell it today you would earn a total of 120.00 from holding Premier Foods PLC or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
Premier Foods PLC vs. JLEN Environmental Assets
Performance |
| Timeline |
| Premier Foods PLC |
| JLEN Environmental Assets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Premier Foods and JLEN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Foods and JLEN Environmental
The main advantage of trading using opposite Premier Foods and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Foods position performs unexpectedly, JLEN Environmental 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 JLEN Environmental will offset losses from the drop in JLEN Environmental's long position.| Premier Foods vs. Samsung Electronics Co | Premier Foods vs. Samsung Electronics Co | Premier Foods vs. Hyundai Motor | Premier Foods vs. Toyota Motor Corp |
| JLEN Environmental vs. Ebro Foods | JLEN Environmental vs. Edita Food Industries | JLEN Environmental vs. Premier Foods PLC | JLEN Environmental vs. Public Storage |
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 Stocks Directory module to find actively traded stocks across global markets.
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