Correlation Between JLT MOBILE and SCOTT TECHNOLOGY

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Can any of the company-specific risk be diversified away by investing in both JLT MOBILE and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JLT MOBILE PUTER and SCOTT TECHNOLOGY, you can compare the effects of market volatilities on JLT MOBILE and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLT MOBILE and SCOTT TECHNOLOGY.

Diversification Opportunities for JLT MOBILE and SCOTT TECHNOLOGY

-0.53
  Correlation Coefficient

Excellent diversification

The 3 months correlation between JLT and SCOTT is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding JLT MOBILE PUTER and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY 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 PUTER are associated (or correlated) with SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of JLT MOBILE i.e., JLT MOBILE and SCOTT TECHNOLOGY go up and down completely randomly.

Pair Corralation between JLT MOBILE and SCOTT TECHNOLOGY

Assuming the 90 days trading horizon JLT MOBILE PUTER is expected to under-perform the SCOTT TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, JLT MOBILE PUTER is 1.36 times less risky than SCOTT TECHNOLOGY. The stock trades about -0.06 of its potential returns per unit of risk. The SCOTT TECHNOLOGY is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  209.00  in SCOTT TECHNOLOGY on September 1, 2024 and sell it today you would lose (73.00) from holding SCOTT TECHNOLOGY or give up 34.93% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

JLT MOBILE PUTER  vs.  SCOTT TECHNOLOGY

 Performance 
       Timeline  
JLT MOBILE PUTER 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days JLT MOBILE PUTER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
SCOTT TECHNOLOGY 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in SCOTT TECHNOLOGY are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical indicators, SCOTT TECHNOLOGY exhibited solid returns over the last few months and may actually be approaching a breakup point.

JLT MOBILE and SCOTT TECHNOLOGY Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JLT MOBILE and SCOTT TECHNOLOGY

The main advantage of trading using opposite JLT MOBILE and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT MOBILE position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.
The idea behind JLT MOBILE PUTER and SCOTT TECHNOLOGY pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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