Correlation Between JLEN Environmental and Gaztransport

Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Gaztransport 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 Gaztransport 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 Gaztransport et Technigaz, you can compare the effects of market volatilities on JLEN Environmental and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Gaztransport.

Diversification Opportunities for JLEN Environmental and Gaztransport

-0.15

Correlation Coefficient

JLEN Environmental  Gaztransport

Good diversification

The 3 months correlation between JLEN and Gaztransport is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Gaztransport go up and down completely randomly.

Pair Corralation between JLEN Environmental and Gaztransport

Assuming the 90 days trading horizon JLEN Environmental is expected to generate 4.78 times less return on investment than Gaztransport. But when comparing it to its historical volatility, JLEN Environmental Assets is 1.71 times less risky than Gaztransport. It trades about 0.03 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  12,961  in Gaztransport et Technigaz on December 26, 2024 and sell it today you would earn a total of  1,674  from holding Gaztransport et Technigaz or generate 12.92% return on investment over 90 days.

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

JLEN Environmental Assets  vs.  Gaztransport et Technigaz

JLEN Environmental Assets

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JLEN Environmental Assets are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JLEN Environmental is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Gaztransport et Technigaz

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Gaztransport unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JLEN Environmental and Gaztransport

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

The idea behind JLEN Environmental Assets and Gaztransport et Technigaz 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.