Correlation Between JLT Mobile and MTI Investment
Can any of the company-specific risk be diversified away by investing in both JLT Mobile and MTI Investment 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 MTI Investment 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 MTI Investment SE, you can compare the effects of market volatilities on JLT Mobile and MTI Investment 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 MTI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLT Mobile and MTI Investment.
Diversification Opportunities for JLT Mobile and MTI Investment
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JLT and MTI is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and MTI Investment SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI Investment SE 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 MTI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI Investment SE has no effect on the direction of JLT Mobile i.e., JLT Mobile and MTI Investment go up and down completely randomly.
Pair Corralation between JLT Mobile and MTI Investment
Assuming the 90 days trading horizon JLT Mobile Computers is expected to generate 0.47 times more return on investment than MTI Investment. However, JLT Mobile Computers is 2.14 times less risky than MTI Investment. It trades about -0.07 of its potential returns per unit of risk. MTI Investment SE is currently generating about -0.05 per unit of risk. If you would invest 466.00 in JLT Mobile Computers on September 12, 2024 and sell it today you would lose (204.00) from holding JLT Mobile Computers or give up 43.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLT Mobile Computers vs. MTI Investment SE
Performance |
| Timeline |
| JLT Mobile Computers |
| MTI Investment SE |
JLT Mobile and MTI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLT Mobile and MTI Investment
The main advantage of trading using opposite JLT Mobile and MTI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT Mobile position performs unexpectedly, MTI Investment 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 MTI Investment will offset losses from the drop in MTI Investment'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 |
| MTI Investment vs. Catella AB | MTI Investment vs. Catella AB A | MTI Investment vs. KABE Group AB | MTI Investment vs. IAR Systems Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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