Correlation Between JE Cleantech and IDEX

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

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

Diversification Opportunities for JE Cleantech and IDEX

-0.23

Correlation Coefficient

JE Cleantech  IDEX

Very good diversification

The 3 months correlation between JCSE and IDEX is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding JE Cleantech Holdings and IDEX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEX and JE Cleantech 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 JE Cleantech Holdings are associated (or correlated) with IDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEX has no effect on the direction of JE Cleantech i.e., JE Cleantech and IDEX go up and down completely randomly.

Pair Corralation between JE Cleantech and IDEX

Given the investment horizon of 90 days JE Cleantech Holdings is expected to generate 2.13 times more return on investment than IDEX. However, JE Cleantech is 2.13 times more volatile than IDEX Corporation. It trades about -0.01 of its potential returns per unit of risk. IDEX Corporation is currently generating about -0.08 per unit of risk. If you would invest  140.00  in JE Cleantech Holdings on November 29, 2024 and sell it today you would lose (7.00) from holding JE Cleantech Holdings or give up 5.0% of portfolio value over 90 days.

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

JE Cleantech Holdings  vs.  IDEX Corp.

JE Cleantech Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JE Cleantech Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, JE Cleantech exhibited solid returns over the last few months and may actually be approaching a breakup point.

IDEX

Risk-Adjusted Performance

Very Weak

Over the last 90 days IDEX Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with JE Cleantech and IDEX

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

The idea behind JE Cleantech Holdings and IDEX Corporation 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.