Correlation Between J Long and Pool

Can any of the company-specific risk be diversified away by investing in both J Long and Pool 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 Pool 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 Pool Corporation, you can compare the effects of market volatilities on J Long and Pool 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 Pool. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Long and Pool.

Diversification Opportunities for J Long and Pool

-0.19

Correlation Coefficient

J Long  Pool

Good diversification

The 3 months correlation between J Long and Pool is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited and Pool Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pool 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 Pool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pool has no effect on the direction of J Long i.e., J Long and Pool go up and down completely randomly.

Pair Corralation between J Long and Pool

Allowing for the 90-day total investment horizon J Long Group Limited is expected to under-perform the Pool. In addition to that, J Long is 3.43 times more volatile than Pool Corporation. It trades about -0.04 of its total potential returns per unit of risk. Pool Corporation is currently generating about 0.02 per unit of volatility. If you would invest  36,344  in Pool Corporation on July 19, 2024 and sell it today you would earn a total of  599.00  from holding Pool Corporation or generate 1.65% return on investment over 90 days.

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

J Long Group Limited  vs.  Pool Corp.

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 latest weak performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pool

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pool Corporation are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Pool disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with J Long and Pool

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

The idea behind J Long Group Limited and Pool Corporation 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.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.