Correlation Between Albertsons Companies and J Long
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies and J Long 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 Albertsons Companies and J Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and J Long Group Limited, you can compare the effects of market volatilities on Albertsons Companies and J Long 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 Albertsons Companies with a short position of J Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and J Long.
Diversification Opportunities for Albertsons Companies and J Long
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Albertsons and J Long is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group and Albertsons Companies 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 Albertsons Companies are associated (or correlated) with J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and J Long go up and down completely randomly.
Pair Corralation between Albertsons Companies and J Long
Considering the 90-day investment horizon Albertsons Companies is expected to generate 7.33 times less return on investment than J Long. But when comparing it to its historical volatility, Albertsons Companies is 3.14 times less risky than J Long. It trades about 0.03 of its potential returns per unit of risk. J Long Group Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 290.00 in J Long Group Limited on September 24, 2024 and sell it today you would earn a total of 13.00 from holding J Long Group Limited or generate 4.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Albertsons Companies vs. J Long Group Limited
Performance |
Timeline |
Albertsons Companies |
J Long Group |
Albertsons Companies and J Long Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Albertsons Companies and J Long
The main advantage of trading using opposite Albertsons Companies and J Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies position performs unexpectedly, J Long 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 J Long will offset losses from the drop in J Long's long position.Albertsons Companies vs. Krispy Kreme | Albertsons Companies vs. Sendas Distribuidora SA | Albertsons Companies vs. Ocado Group plc |
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Check out your portfolio center.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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