Correlation Between J B and EL D

Can any of the company-specific risk be diversified away by investing in both J B and EL D 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 J B and EL D into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between J B Ladenis and EL D Mouzakis, you can compare the effects of market volatilities on J B and EL D 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 J B with a short position of EL D. Check out your portfolio center. Please also check ongoing floating volatility patterns of J B and EL D.

Diversification Opportunities for J B and EL D

0.45

Correlation Coefficient

J B  EL D

Very weak diversification

The 3 months correlation between MIN and MOYZK is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding J B Ladenis and EL D Mouzakis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EL D Mouzakis and J B 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 J B Ladenis are associated (or correlated) with EL D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EL D Mouzakis has no effect on the direction of J B i.e., J B and EL D go up and down completely randomly.

Pair Corralation between J B and EL D

Assuming the 90 days trading horizon J B Ladenis is expected to generate 1.15 times more return on investment than EL D. However, J B is 1.15 times more volatile than EL D Mouzakis. It trades about -0.01 of its potential returns per unit of risk. EL D Mouzakis is currently generating about -0.05 per unit of risk. If you would invest  49.00  in J B Ladenis on December 29, 2024 and sell it today you would lose (2.00) from holding J B Ladenis or give up 4.08% of portfolio value over 90 days.

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

J B Ladenis  vs.  EL D Mouzakis

J B Ladenis

Risk-Adjusted Performance

Very Weak

Over the last 90 days J B Ladenis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, J B is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

EL D Mouzakis

Risk-Adjusted Performance

Very Weak

Over the last 90 days EL D Mouzakis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with J B and EL D

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

The idea behind J B Ladenis and EL D Mouzakis 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.