Correlation Between JLT Mobile and FormPipe Software
Can any of the company-specific risk be diversified away by investing in both JLT Mobile and FormPipe Software 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 JLT Mobile and FormPipe Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JLT Mobile Computers and FormPipe Software AB, you can compare the effects of market volatilities on JLT Mobile and FormPipe Software 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 JLT Mobile with a short position of FormPipe Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLT Mobile and FormPipe Software.
Diversification Opportunities for JLT Mobile and FormPipe Software
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JLT and FormPipe is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and FormPipe Software AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormPipe Software and JLT Mobile 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 JLT Mobile Computers are associated (or correlated) with FormPipe Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormPipe Software has no effect on the direction of JLT Mobile i.e., JLT Mobile and FormPipe Software go up and down completely randomly.
Pair Corralation between JLT Mobile and FormPipe Software
Assuming the 90 days trading horizon JLT Mobile Computers is expected to under-perform the FormPipe Software. In addition to that, JLT Mobile is 1.21 times more volatile than FormPipe Software AB. It trades about -0.24 of its total potential returns per unit of risk. FormPipe Software AB is currently generating about -0.07 per unit of volatility. If you would invest 2,584 in FormPipe Software AB on August 29, 2024 and sell it today you would lose (74.00) from holding FormPipe Software AB or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLT Mobile Computers vs. FormPipe Software AB
Performance |
| Timeline |
| JLT Mobile Computers |
| FormPipe Software |
JLT Mobile and FormPipe Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLT Mobile and FormPipe Software
The main advantage of trading using opposite JLT Mobile and FormPipe Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT Mobile position performs unexpectedly, FormPipe Software 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 FormPipe Software will offset losses from the drop in FormPipe Software's long position.| JLT Mobile vs. Anoto Group AB | JLT Mobile vs. Avensia publ AB | JLT Mobile vs. Diadrom Holding AB | JLT Mobile vs. Nepa AB |
| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic AB |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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