Correlation Between Hurco Companies and JE Cleantech

Can any of the company-specific risk be diversified away by investing in both Hurco Companies and JE 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 Hurco Companies and JE Cleantech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hurco Companies and JE Cleantech Holdings, you can compare the effects of market volatilities on Hurco Companies and JE 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 Hurco Companies with a short position of JE Cleantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurco Companies and JE Cleantech.

Diversification Opportunities for Hurco Companies and JE Cleantech

0.87

Correlation Coefficient

Hurco Companies  JE Cleantech

Very poor diversification

The 3 months correlation between Hurco and JCSE is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and JE Cleantech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JE Cleantech Holdings and Hurco Companies 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 Hurco Companies are associated (or correlated) with JE Cleantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JE Cleantech Holdings has no effect on the direction of Hurco Companies i.e., Hurco Companies and JE Cleantech go up and down completely randomly.

Pair Corralation between Hurco Companies and JE Cleantech

Given the investment horizon of 90 days Hurco Companies is expected to under-perform the JE Cleantech. But the stock apears to be less risky and, when comparing its historical volatility, Hurco Companies is 1.47 times less risky than JE Cleantech. The stock trades about -0.08 of its potential returns per unit of risk. The JE Cleantech Holdings is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  137.00  in JE Cleantech Holdings on December 27, 2024 and sell it today you would lose (25.00) from holding JE Cleantech Holdings or give up 18.25% of portfolio value over 90 days.

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

Hurco Companies  vs.  JE Cleantech Holdings

Hurco Companies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hurco Companies 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 rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

JE Cleantech Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days JE Cleantech Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Hurco Companies and JE Cleantech

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

The idea behind Hurco Companies and JE Cleantech Holdings 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.