Correlation Between JLT Mobile and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both JLT Mobile and Nordea Bank 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 Nordea Bank 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 Nordea Bank Abp, you can compare the effects of market volatilities on JLT Mobile and Nordea Bank 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 Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLT Mobile and Nordea Bank.
Diversification Opportunities for JLT Mobile and Nordea Bank
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JLT and Nordea is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and Nordea Bank Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea Bank Abp 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 Nordea Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Bank Abp has no effect on the direction of JLT Mobile i.e., JLT Mobile and Nordea Bank go up and down completely randomly.
Pair Corralation between JLT Mobile and Nordea Bank
Assuming the 90 days trading horizon JLT Mobile Computers is expected to under-perform the Nordea Bank. In addition to that, JLT Mobile is 2.18 times more volatile than Nordea Bank Abp. It trades about -0.15 of its total potential returns per unit of risk. Nordea Bank Abp is currently generating about -0.05 per unit of volatility. If you would invest 12,470 in Nordea Bank Abp on September 1, 2024 and sell it today you would lose (135.00) from holding Nordea Bank Abp or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLT Mobile Computers vs. Nordea Bank Abp
Performance |
| Timeline |
| JLT Mobile Computers |
| Nordea Bank Abp |
JLT Mobile and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLT Mobile and Nordea Bank
The main advantage of trading using opposite JLT Mobile and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT Mobile position performs unexpectedly, Nordea Bank 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 Nordea Bank will offset losses from the drop in Nordea Bank's long position.| JLT Mobile vs. Anoto Group AB | JLT Mobile vs. Avensia publ AB | JLT Mobile vs. Mekonomen AB | JLT Mobile vs. Embellence Group AB |
| Nordea Bank vs. High Coast Distillery | Nordea Bank vs. Viva Wine Group | Nordea Bank vs. Lohilo Foods AB | Nordea Bank vs. Fractal Gaming 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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