Correlation Between JLEN Environmental and HCA Healthcare

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

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

Diversification Opportunities for JLEN Environmental and HCA Healthcare

0.79

Correlation Coefficient

JLEN Environmental  HCA Healthcare

Poor diversification

The 3 months correlation between JLEN and HCA is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and JLEN Environmental 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 JLEN Environmental Assets are associated (or correlated) with HCA Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCA Healthcare has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and HCA Healthcare go up and down completely randomly.

Pair Corralation between JLEN Environmental and HCA Healthcare

Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the HCA Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, JLEN Environmental Assets is 1.44 times less risky than HCA Healthcare. The stock trades about -0.25 of its potential returns per unit of risk. The HCA Healthcare is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  39,164  in HCA Healthcare on August 31, 2024 and sell it today you would lose (6,458) from holding HCA Healthcare or give up 16.49% of portfolio value over 90 days.

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

JLEN Environmental Assets  vs.  HCA Healthcare

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

HCA Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HCA Healthcare 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 December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with JLEN Environmental and HCA Healthcare

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

The idea behind JLEN Environmental Assets and HCA Healthcare 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.