Correlation Between JLT Mobile and Nordic Iron
Can any of the company-specific risk be diversified away by investing in both JLT Mobile and Nordic Iron 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 Nordic Iron 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 Nordic Iron Ore, you can compare the effects of market volatilities on JLT Mobile and Nordic Iron 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 Nordic Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLT Mobile and Nordic Iron.
Diversification Opportunities for JLT Mobile and Nordic Iron
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JLT and Nordic is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and Nordic Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Iron Ore 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 Nordic Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Iron Ore has no effect on the direction of JLT Mobile i.e., JLT Mobile and Nordic Iron go up and down completely randomly.
Pair Corralation between JLT Mobile and Nordic Iron
Assuming the 90 days trading horizon JLT Mobile Computers is expected to under-perform the Nordic Iron. But the stock apears to be less risky and, when comparing its historical volatility, JLT Mobile Computers is 1.61 times less risky than Nordic Iron. The stock trades about -0.15 of its potential returns per unit of risk. The Nordic Iron Ore is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 486.00 in Nordic Iron Ore on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Nordic Iron Ore or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLT Mobile Computers vs. Nordic Iron Ore
Performance |
| Timeline |
| JLT Mobile Computers |
| Nordic Iron Ore |
JLT Mobile and Nordic Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLT Mobile and Nordic Iron
The main advantage of trading using opposite JLT Mobile and Nordic Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT Mobile position performs unexpectedly, Nordic Iron 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 Nordic Iron will offset losses from the drop in Nordic Iron'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 |
| Nordic Iron vs. Leading Edge Materials | Nordic Iron vs. Alzinova AB | Nordic Iron vs. SaltX Technology Holding | Nordic Iron vs. KABE Group 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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