Correlation Between JX Luxventure and Coty

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

By analyzing existing cross correlation between JX Luxventure and Coty Inc, you can compare the effects of market volatilities on JX Luxventure and Coty 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 JX Luxventure with a short position of Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of JX Luxventure and Coty.

Diversification Opportunities for JX Luxventure and Coty

0.63

Correlation Coefficient

JX Luxventure  Coty

Poor diversification

The 3 months correlation between LLL and Coty is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding JX Luxventure and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc and JX Luxventure 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 JX Luxventure are associated (or correlated) with Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of JX Luxventure i.e., JX Luxventure and Coty go up and down completely randomly.

Pair Corralation between JX Luxventure and Coty

If you would invest  84.00  in JX Luxventure on March 13, 2024 and sell it today you would earn a total of  0.00  from holding JX Luxventure or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.61%
Values	Daily Returns

JX Luxventure  vs.  Coty Inc

JX Luxventure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JX Luxventure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, JX Luxventure is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Coty Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coty Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with JX Luxventure and Coty

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

The idea behind JX Luxventure and Coty Inc 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.