Correlation Between ETC On and JLEN Environmental

Can any of the company-specific risk be diversified away by investing in both ETC On 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 ETC On and JLEN Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ETC on CMCI and JLEN Environmental Assets, you can compare the effects of market volatilities on ETC On 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 ETC On with a short position of JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETC On and JLEN Environmental.

Diversification Opportunities for ETC On and JLEN Environmental

-0.27

Correlation Coefficient

ETC On  JLEN Environmental

Very good diversification

The 3 months correlation between ETC and JLEN is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding ETC on CMCI 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 ETC On 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 ETC on CMCI 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 ETC On i.e., ETC On and JLEN Environmental go up and down completely randomly.

Pair Corralation between ETC On and JLEN Environmental

Assuming the 90 days trading horizon ETC on CMCI is expected to generate 0.43 times more return on investment than JLEN Environmental. However, ETC on CMCI is 2.33 times less risky than JLEN Environmental. It trades about 0.0 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.23 per unit of risk. If you would invest  17,521  in ETC on CMCI on September 30, 2024 and sell it today you would lose (2.00) from holding ETC on CMCI or give up 0.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ETC on CMCI  vs.  JLEN Environmental Assets

ETC on CMCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ETC on CMCI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ETC On is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

JLEN Environmental Assets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JLEN Environmental Assets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ETC On and JLEN Environmental

The main advantage of trading using opposite ETC On and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETC On 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.

The idea behind ETC on CMCI and JLEN Environmental Assets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.