Correlation Between Lee Enterprises and John Wiley

Can any of the company-specific risk be diversified away by investing in both Lee Enterprises and John Wiley 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 Lee Enterprises and John Wiley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lee Enterprises Incorporated and John Wiley Sons, you can compare the effects of market volatilities on Lee Enterprises and John Wiley 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 Lee Enterprises with a short position of John Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lee Enterprises and John Wiley.

Diversification Opportunities for Lee Enterprises and John Wiley

0.14

Correlation Coefficient

Lee Enterprises  John Wiley

Average diversification

The 3 months correlation between Lee and John is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Lee Enterprises Incorporated and John Wiley Sons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Wiley Sons and Lee Enterprises 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 Lee Enterprises Incorporated are associated (or correlated) with John Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Wiley Sons has no effect on the direction of Lee Enterprises i.e., Lee Enterprises and John Wiley go up and down completely randomly.

Pair Corralation between Lee Enterprises and John Wiley

Considering the 90-day investment horizon Lee Enterprises Incorporated is expected to under-perform the John Wiley. In addition to that, Lee Enterprises is 1.55 times more volatile than John Wiley Sons. It trades about -0.13 of its total potential returns per unit of risk. John Wiley Sons is currently generating about 0.0 per unit of volatility. If you would invest  4,491  in John Wiley Sons on December 26, 2024 and sell it today you would lose (61.00) from holding John Wiley Sons or give up 1.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lee Enterprises Incorporated  vs.  John Wiley Sons

Lee Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lee Enterprises Incorporated 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

John Wiley Sons

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Wiley Sons has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, John Wiley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lee Enterprises and John Wiley

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

The idea behind Lee Enterprises Incorporated and John Wiley Sons 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.