Correlation Between JLT Mobile and Media
Can any of the company-specific risk be diversified away by investing in both JLT Mobile and Media 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 Media 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 Media and Games, you can compare the effects of market volatilities on JLT Mobile and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLT Mobile and Media.
Diversification Opportunities for JLT Mobile and Media
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JLT and Media is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of JLT Mobile i.e., JLT Mobile and Media go up and down completely randomly.
Pair Corralation between JLT Mobile and Media
Assuming the 90 days trading horizon JLT Mobile Computers is expected to under-perform the Media. But the stock apears to be less risky and, when comparing its historical volatility, JLT Mobile Computers is 1.67 times less risky than Media. The stock trades about -0.07 of its potential returns per unit of risk. The Media and Games is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,676 in Media and Games on December 5, 2024 and sell it today you would earn a total of 2,234 from holding Media and Games or generate 133.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.39% |
| Values | Daily Returns |
JLT Mobile Computers vs. Media and Games
Performance |
| Timeline |
| JLT Mobile Computers |
| Media and Games |
JLT Mobile and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLT Mobile and Media
The main advantage of trading using opposite JLT Mobile and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT Mobile position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.| JLT Mobile vs. Anoto Group AB | ||
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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