Correlation Between JLEN Environmental and Golden Metal

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

Diversification Opportunities for JLEN Environmental and Golden Metal

-0.56

Correlation Coefficient

JLEN Environmental  Golden Metal

Excellent diversification

The 3 months correlation between JLEN and Golden is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources 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 Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Golden Metal go up and down completely randomly.

Pair Corralation between JLEN Environmental and Golden Metal

Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Golden Metal. But the stock apears to be less risky and, when comparing its historical volatility, JLEN Environmental Assets is 2.42 times less risky than Golden Metal. The stock trades about -0.19 of its potential returns per unit of risk. The Golden Metal Resources is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,650  in Golden Metal Resources on October 8, 2024 and sell it today you would earn a total of  550.00  from holding Golden Metal Resources or generate 20.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

JLEN Environmental Assets  vs.  Golden Metal Resources

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

Golden Metal Resources

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Metal Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Golden Metal unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JLEN Environmental and Golden Metal

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

The idea behind JLEN Environmental Assets and Golden Metal Resources 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.