Correlation Between Vitec Software and JLT Mobile
Can any of the company-specific risk be diversified away by investing in both Vitec Software 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 Vitec Software and JLT Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vitec Software Group and JLT Mobile Computers, you can compare the effects of market volatilities on Vitec Software 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 Vitec Software with a short position of JLT Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitec Software and JLT Mobile.
Diversification Opportunities for Vitec Software and JLT Mobile
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vitec and JLT is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Vitec Software Group 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 Vitec Software 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 Vitec Software Group 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 Vitec Software i.e., Vitec Software and JLT Mobile go up and down completely randomly.
Pair Corralation between Vitec Software and JLT Mobile
Assuming the 90 days trading horizon Vitec Software Group is expected to generate 0.89 times more return on investment than JLT Mobile. However, Vitec Software Group is 1.12 times less risky than JLT Mobile. It trades about -0.02 of its potential returns per unit of risk. JLT Mobile Computers is currently generating about -0.08 per unit of risk. If you would invest 57,707 in Vitec Software Group on August 29, 2024 and sell it today you would lose (11,107) from holding Vitec Software Group or give up 19.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vitec Software Group vs. JLT Mobile Computers
Performance |
| Timeline |
| Vitec Software Group |
| JLT Mobile Computers |
Vitec Software and JLT Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vitec Software and JLT Mobile
The main advantage of trading using opposite Vitec Software and JLT Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitec Software 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.| Vitec Software vs. Lifco AB | Vitec Software vs. Lagercrantz Group AB | Vitec Software vs. Addtech AB | Vitec Software vs. Instalco Intressenter AB |
| JLT Mobile vs. Anoto Group AB | JLT Mobile vs. Avensia publ AB | JLT Mobile vs. Diadrom Holding AB | JLT Mobile vs. Kentima Holding publ |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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