Correlation Between JLEN Environmental and SSgA SPDR

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

Diversification Opportunities for JLEN Environmental and SSgA SPDR

-0.92

Correlation Coefficient

JLEN Environmental  SSgA SPDR

Pay attention - limited upside

The 3 months correlation between JLEN and SSgA is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs 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 SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and SSgA SPDR go up and down completely randomly.

Pair Corralation between JLEN Environmental and SSgA SPDR

Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the SSgA SPDR. In addition to that, JLEN Environmental is 3.03 times more volatile than SSgA SPDR ETFs. It trades about -0.23 of its total potential returns per unit of risk. SSgA SPDR ETFs is currently generating about -0.06 per unit of volatility. If you would invest  18,987  in SSgA SPDR ETFs on September 30, 2024 and sell it today you would lose (96.00) from holding SSgA SPDR ETFs or give up 0.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

JLEN Environmental Assets  vs.  SSgA SPDR ETFs

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SSgA SPDR ETFs

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SSgA SPDR ETFs are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SSgA SPDR may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JLEN Environmental and SSgA SPDR

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

The idea behind JLEN Environmental Assets and SSgA SPDR ETFs 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.