Correlation Between JLT Mobile and Redsense Medical
Can any of the company-specific risk be diversified away by investing in both JLT Mobile and Redsense Medical 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 Redsense Medical 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 Redsense Medical AB, you can compare the effects of market volatilities on JLT Mobile and Redsense Medical 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 Redsense Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLT Mobile and Redsense Medical.
Diversification Opportunities for JLT Mobile and Redsense Medical
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JLT and Redsense is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and Redsense Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redsense Medical 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 Redsense Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redsense Medical has no effect on the direction of JLT Mobile i.e., JLT Mobile and Redsense Medical go up and down completely randomly.
Pair Corralation between JLT Mobile and Redsense Medical
Assuming the 90 days trading horizon JLT Mobile Computers is expected to under-perform the Redsense Medical. But the stock apears to be less risky and, when comparing its historical volatility, JLT Mobile Computers is 1.93 times less risky than Redsense Medical. The stock trades about -0.04 of its potential returns per unit of risk. The Redsense Medical AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 980.00 in Redsense Medical AB on August 26, 2024 and sell it today you would lose (350.00) from holding Redsense Medical AB or give up 35.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.4% |
| Values | Daily Returns |
JLT Mobile Computers vs. Redsense Medical AB
Performance |
| Timeline |
| JLT Mobile Computers |
| Redsense Medical |
JLT Mobile and Redsense Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLT Mobile and Redsense Medical
The main advantage of trading using opposite JLT Mobile and Redsense Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT Mobile position performs unexpectedly, Redsense Medical 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 Redsense Medical will offset losses from the drop in Redsense Medical's long position.| JLT Mobile vs. Anoto Group AB | JLT Mobile vs. Avensia publ AB | JLT Mobile vs. Diadrom Holding AB | JLT Mobile vs. Kentima Holding publ |
| Redsense Medical vs. Addtech AB | Redsense Medical vs. Lifco AB | Redsense Medical vs. Indutrade AB | Redsense Medical vs. Lagercrantz 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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