Correlation Between JLT Mobile and Vitec Software
Can any of the company-specific risk be diversified away by investing in both JLT Mobile and Vitec Software 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 Vitec Software 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 Vitec Software Group, you can compare the effects of market volatilities on JLT Mobile and Vitec Software 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 Vitec Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLT Mobile and Vitec Software.
Diversification Opportunities for JLT Mobile and Vitec Software
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JLT and Vitec is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and Vitec Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitec Software Group 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 Vitec Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitec Software Group has no effect on the direction of JLT Mobile i.e., JLT Mobile and Vitec Software go up and down completely randomly.
Pair Corralation between JLT Mobile and Vitec Software
Assuming the 90 days trading horizon JLT Mobile Computers is expected to under-perform the Vitec Software. In addition to that, JLT Mobile is 1.25 times more volatile than Vitec Software Group. It trades about -0.06 of its total potential returns per unit of risk. Vitec Software Group is currently generating about 0.02 per unit of volatility. If you would invest 54,961 in Vitec Software Group on December 5, 2024 and sell it today you would earn a total of 3,239 from holding Vitec Software Group or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.69% |
| Values | Daily Returns |
JLT Mobile Computers vs. Vitec Software Group
Performance |
| Timeline |
| JLT Mobile Computers |
| Vitec Software Group |
JLT Mobile and Vitec Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLT Mobile and Vitec Software
The main advantage of trading using opposite JLT Mobile and Vitec Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT Mobile position performs unexpectedly, Vitec Software 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 Vitec Software will offset losses from the drop in Vitec Software's long position.| JLT Mobile vs. Anoto Group AB | ||
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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