Correlation Between Jeld Wen and Elevate Credit

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

By analyzing existing cross correlation between Jeld Wen Holding and Elevate Credit, you can compare the effects of market volatilities on Jeld Wen and Elevate Credit 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 Jeld Wen with a short position of Elevate Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeld Wen and Elevate Credit.

Diversification Opportunities for Jeld Wen and Elevate Credit

0.38

Correlation Coefficient

Jeld Wen  Elevate Credit

Weak diversification

The 3 months correlation between Jeld and Elevate is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Jeld Wen Holding and Elevate Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevate Credit and Jeld Wen 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 Jeld Wen Holding are associated (or correlated) with Elevate Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevate Credit has no effect on the direction of Jeld Wen i.e., Jeld Wen and Elevate Credit go up and down completely randomly.

Pair Corralation between Jeld Wen and Elevate Credit

If you would invest  187.00  in Elevate Credit on February 3, 2024 and sell it today you would earn a total of  0.00  from holding Elevate Credit or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Jeld Wen Holding  vs.  Elevate Credit

Jeld Wen Holding

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jeld Wen Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent essential indicators, Jeld Wen may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Elevate Credit

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jeld Wen and Elevate Credit

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

The idea behind Jeld Wen Holding and Elevate Credit 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.