Correlation Between J Long and WestRock

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

By analyzing existing cross correlation between J Long Group Limited and WestRock Co, you can compare the effects of market volatilities on J Long and WestRock 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 Long with a short position of WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Long and WestRock.

Diversification Opportunities for J Long and WestRock

-0.79

Correlation Coefficient

J Long  WestRock

Pay attention - limited upside

The 3 months correlation between J Long and WestRock is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited and WestRock Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WestRock and J Long 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 Long Group Limited are associated (or correlated) with WestRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WestRock has no effect on the direction of J Long i.e., J Long and WestRock go up and down completely randomly.

Pair Corralation between J Long and WestRock

Allowing for the 90-day total investment horizon J Long Group Limited is expected to under-perform the WestRock. In addition to that, J Long is 5.62 times more volatile than WestRock Co. It trades about -0.06 of its total potential returns per unit of risk. WestRock Co is currently generating about 0.12 per unit of volatility. If you would invest  4,890  in WestRock Co on February 3, 2024 and sell it today you would earn a total of  221.00  from holding WestRock Co or generate 4.52% return on investment over 90 days.

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

J Long Group Limited  vs.  WestRock Co

J Long Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days J Long Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

WestRock

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WestRock Co are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, WestRock disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with J Long and WestRock

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

The idea behind J Long Group Limited and WestRock Co 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.