Correlation Between Media and JLT Mobile
Can any of the company-specific risk be diversified away by investing in both Media and JLT Mobile 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 Media and JLT Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media and Games and JLT Mobile Computers, you can compare the effects of market volatilities on Media and JLT Mobile 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 Media with a short position of JLT Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and JLT Mobile.
Diversification Opportunities for Media and JLT Mobile
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Media and JLT is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games and JLT Mobile Computers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLT Mobile Computers and Media 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 Media and Games are associated (or correlated) with JLT Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLT Mobile Computers has no effect on the direction of Media i.e., Media and JLT Mobile go up and down completely randomly.
Pair Corralation between Media and JLT Mobile
Assuming the 90 days trading horizon Media and Games is expected to generate 1.78 times more return on investment than JLT Mobile. However, Media is 1.78 times more volatile than JLT Mobile Computers. It trades about 0.1 of its potential returns per unit of risk. JLT Mobile Computers is currently generating about -0.06 per unit of risk. If you would invest 1,600 in Media and Games on December 5, 2024 and sell it today you would earn a total of 2,310 from holding Media and Games or generate 144.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.69% |
| Values | Daily Returns |
Media and Games vs. JLT Mobile Computers
Performance |
| Timeline |
| Media and Games |
| JLT Mobile Computers |
Media and JLT Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media and JLT Mobile
The main advantage of trading using opposite Media and JLT Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media position performs unexpectedly, JLT Mobile 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 JLT Mobile will offset losses from the drop in JLT Mobile's long position.| Media vs. Embracer 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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