Correlation Between JLT Mobile and Nexam Chemical
Can any of the company-specific risk be diversified away by investing in both JLT Mobile and Nexam Chemical 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 Nexam Chemical 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 Nexam Chemical Holding, you can compare the effects of market volatilities on JLT Mobile and Nexam Chemical 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 Nexam Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLT Mobile and Nexam Chemical.
Diversification Opportunities for JLT Mobile and Nexam Chemical
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JLT and Nexam is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and Nexam Chemical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexam Chemical Holding 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 Nexam Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexam Chemical Holding has no effect on the direction of JLT Mobile i.e., JLT Mobile and Nexam Chemical go up and down completely randomly.
Pair Corralation between JLT Mobile and Nexam Chemical
Assuming the 90 days trading horizon JLT Mobile Computers is expected to under-perform the Nexam Chemical. But the stock apears to be less risky and, when comparing its historical volatility, JLT Mobile Computers is 1.13 times less risky than Nexam Chemical. The stock trades about -0.15 of its potential returns per unit of risk. The Nexam Chemical Holding is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 406.00 in Nexam Chemical Holding on September 1, 2024 and sell it today you would lose (7.00) from holding Nexam Chemical Holding or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLT Mobile Computers vs. Nexam Chemical Holding
Performance |
| Timeline |
| JLT Mobile Computers |
| Nexam Chemical Holding |
JLT Mobile and Nexam Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLT Mobile and Nexam Chemical
The main advantage of trading using opposite JLT Mobile and Nexam Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT Mobile position performs unexpectedly, Nexam Chemical 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 Nexam Chemical will offset losses from the drop in Nexam Chemical'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 |
| Nexam Chemical vs. Holmen AB | Nexam Chemical vs. Svenska Cellulosa Aktiebolaget | Nexam Chemical vs. Husqvarna AB | Nexam Chemical vs. Alfa Laval 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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