Correlation Between JLEN Environmental and Alfa Financial

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

Diversification Opportunities for JLEN Environmental and Alfa Financial

-0.48

Correlation Coefficient

JLEN Environmental  Alfa Financial

Very good diversification

The 3 months correlation between JLEN and Alfa is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Alfa Financial go up and down completely randomly.

Pair Corralation between JLEN Environmental and Alfa Financial

Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Alfa Financial. But the stock apears to be less risky and, when comparing its historical volatility, JLEN Environmental Assets is 1.82 times less risky than Alfa Financial. The stock trades about -0.05 of its potential returns per unit of risk. The Alfa Financial Software is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  15,824  in Alfa Financial Software on October 11, 2024 and sell it today you would earn a total of  5,076  from holding Alfa Financial Software or generate 32.08% return on investment over 90 days.

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

JLEN Environmental Assets  vs.  Alfa Financial Software

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Alfa Financial Software

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alfa Financial Software are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alfa Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with JLEN Environmental and Alfa Financial

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

The idea behind JLEN Environmental Assets and Alfa Financial Software 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.