Correlation Between SPDR SP and JLEN Environmental
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SPDR SP and JLEN Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Materials and JLEN Environmental Assets, you can compare the effects of market volatilities on SPDR SP 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 SPDR SP with a short position of JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and JLEN Environmental.
Diversification Opportunities for SPDR SP and JLEN Environmental
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SPDR and JLEN is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Materials 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 SPDR SP 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 SPDR SP Materials 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 SPDR SP i.e., SPDR SP and JLEN Environmental go up and down completely randomly.
Pair Corralation between SPDR SP and JLEN Environmental
Assuming the 90 days trading horizon SPDR SP Materials is expected to generate 0.67 times more return on investment than JLEN Environmental. However, SPDR SP Materials is 1.49 times less risky than JLEN Environmental. It trades about 0.04 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.06 per unit of risk. If you would invest 4,105 in SPDR SP Materials on September 12, 2024 and sell it today you would earn a total of 326.00 from holding SPDR SP Materials or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.0% |
| Values | Daily Returns |
SPDR SP Materials vs. JLEN Environmental Assets
Performance |
| Timeline |
| SPDR SP Materials |
| JLEN Environmental Assets |
SPDR SP and JLEN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and JLEN Environmental
The main advantage of trading using opposite SPDR SP and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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.| SPDR SP vs. SPDR Dow Jones | SPDR SP vs. SPDR SP Dividend | SPDR SP vs. SPDR Barclays Euro | SPDR SP vs. SPDR SP Consumer |
| JLEN Environmental vs. Vienna Insurance Group | JLEN Environmental vs. Tyson Foods Cl | JLEN Environmental vs. LPKF Laser Electronics | JLEN Environmental vs. UNIQA Insurance Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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