Correlation Between Van De and Jensen

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

By analyzing existing cross correlation between Van de Velde and Jensen Group, you can compare the effects of market volatilities on Van De and Jensen 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 Van De with a short position of Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Van De and Jensen.

Diversification Opportunities for Van De and Jensen

-0.09

Correlation Coefficient

Van De  Jensen

Good diversification

The 3 months correlation between Van and Jensen is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Van de Velde and Jensen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Group and Van De 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 Van de Velde are associated (or correlated) with Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Group has no effect on the direction of Van De i.e., Van De and Jensen go up and down completely randomly.

Pair Corralation between Van De and Jensen

Assuming the 90 days trading horizon Van de Velde is expected to under-perform the Jensen. But the stock apears to be less risky and, when comparing its historical volatility, Van de Velde is 1.94 times less risky than Jensen. The stock trades about -0.12 of its potential returns per unit of risk. The Jensen Group is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  4,380  in Jensen Group on September 4, 2024 and sell it today you would lose (220.00) from holding Jensen Group or give up 5.02% of portfolio value over 90 days.

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

Van de Velde  vs.  Jensen Group

Van de Velde

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Van de Velde has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Jensen Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jensen Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Jensen is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Van De and Jensen

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

The idea behind Van de Velde and Jensen 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.