Correlation Between JLEN Environmental and Global Opportunities

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

Diversification Opportunities for JLEN Environmental and Global Opportunities

0.46

Correlation Coefficient

JLEN Environmental  Global Opportunities

Very weak diversification

The 3 months correlation between JLEN and Global is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Global Opportunities Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Opportunities 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 Global Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Opportunities has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Global Opportunities go up and down completely randomly.

Pair Corralation between JLEN Environmental and Global Opportunities

Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Global Opportunities. In addition to that, JLEN Environmental is 1.02 times more volatile than Global Opportunities Trust. It trades about -0.05 of its total potential returns per unit of risk. Global Opportunities Trust is currently generating about -0.01 per unit of volatility. If you would invest  32,290  in Global Opportunities Trust on October 3, 2024 and sell it today you would lose (4,090) from holding Global Opportunities Trust or give up 12.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

JLEN Environmental Assets  vs.  Global Opportunities Trust

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.

Global Opportunities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Opportunities Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Global Opportunities is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JLEN Environmental and Global Opportunities

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

The idea behind JLEN Environmental Assets and Global Opportunities Trust 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.