Correlation Between JLF INVESTMENT and CVW CLEANTECH

Can any of the company-specific risk be diversified away by investing in both JLF INVESTMENT and CVW CLEANTECH 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 JLF INVESTMENT and CVW CLEANTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JLF INVESTMENT and CVW CLEANTECH INC, you can compare the effects of market volatilities on JLF INVESTMENT and CVW CLEANTECH 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 JLF INVESTMENT with a short position of CVW CLEANTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLF INVESTMENT and CVW CLEANTECH.

Diversification Opportunities for JLF INVESTMENT and CVW CLEANTECH

0.0

Correlation Coefficient

JLF INVESTMENT  CVW CLEANTECH

Pay attention - limited upside

The 3 months correlation between JLF and CVW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JLF INVESTMENT and CVW CLEANTECH INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CLEANTECH INC and JLF INVESTMENT 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 JLF INVESTMENT are associated (or correlated) with CVW CLEANTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CLEANTECH INC has no effect on the direction of JLF INVESTMENT i.e., JLF INVESTMENT and CVW CLEANTECH go up and down completely randomly.

Pair Corralation between JLF INVESTMENT and CVW CLEANTECH

If you would invest  55.00  in CVW CLEANTECH INC on October 25, 2024 and sell it today you would earn a total of  1.00  from holding CVW CLEANTECH INC or generate 1.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

JLF INVESTMENT  vs.  CVW CLEANTECH INC

JLF INVESTMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JLF INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JLF INVESTMENT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

CVW CLEANTECH INC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CVW CLEANTECH INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, CVW CLEANTECH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JLF INVESTMENT and CVW CLEANTECH

The main advantage of trading using opposite JLF INVESTMENT and CVW CLEANTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLF INVESTMENT position performs unexpectedly, CVW CLEANTECH 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 CVW CLEANTECH will offset losses from the drop in CVW CLEANTECH's long position.

The idea behind JLF INVESTMENT and CVW CLEANTECH INC 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.

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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.