Correlation Between JFL Living and Loft II

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

By analyzing existing cross correlation between JFL Living Fundo and Loft II Fundo, you can compare the effects of market volatilities on JFL Living and Loft II 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 JFL Living with a short position of Loft II. Check out your portfolio center. Please also check ongoing floating volatility patterns of JFL Living and Loft II.

Diversification Opportunities for JFL Living and Loft II

0.0

Correlation Coefficient

JFL Living  Loft II

Pay attention - limited upside

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

Pair Corralation between JFL Living and Loft II

If you would invest (100.00) in Loft II Fundo on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Loft II Fundo or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

JFL Living Fundo  vs.  Loft II Fundo

JFL Living Fundo

Risk-Adjusted Performance

Very Weak

Over the last 90 days JFL Living Fundo has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong essential indicators, JFL Living is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Loft II Fundo

Risk-Adjusted Performance

Modest

Over the last 90 days Loft II Fundo has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Loft II is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JFL Living and Loft II

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

The idea behind JFL Living Fundo and Loft II Fundo 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.