Correlation Between JLEN Environmental and Roebuck Food

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

Diversification Opportunities for JLEN Environmental and Roebuck Food

-0.63

Correlation Coefficient

JLEN Environmental  Roebuck Food

Excellent diversification

The 3 months correlation between JLEN and Roebuck is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Roebuck Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roebuck Food Group 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 Roebuck Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roebuck Food Group has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Roebuck Food go up and down completely randomly.

Pair Corralation between JLEN Environmental and Roebuck Food

Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Roebuck Food. In addition to that, JLEN Environmental is 1.89 times more volatile than Roebuck Food Group. It trades about -0.01 of its total potential returns per unit of risk. Roebuck Food Group is currently generating about -0.01 per unit of volatility. If you would invest  1,660  in Roebuck Food Group on December 30, 2024 and sell it today you would lose (10.00) from holding Roebuck Food Group or give up 0.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

JLEN Environmental Assets  vs.  Roebuck Food Group

JLEN Environmental Assets

Risk-Adjusted Performance

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 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.

Roebuck Food Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Roebuck Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Roebuck Food 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 Roebuck Food

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

The idea behind JLEN Environmental Assets and Roebuck Food Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.