Correlation Between Ferronordic and JLT Mobile

Can any of the company-specific risk be diversified away by investing in both Ferronordic 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 Ferronordic and JLT Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ferronordic AB and JLT Mobile Computers, you can compare the effects of market volatilities on Ferronordic 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 Ferronordic with a short position of JLT Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferronordic and JLT Mobile.

Diversification Opportunities for Ferronordic and JLT Mobile

0.44

Correlation Coefficient

Ferronordic  JLT Mobile

Very weak diversification

The 3 months correlation between Ferronordic and JLT is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ferronordic AB 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 Ferronordic 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 Ferronordic AB 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 Ferronordic i.e., Ferronordic and JLT Mobile go up and down completely randomly.

Pair Corralation between Ferronordic and JLT Mobile

Assuming the 90 days trading horizon Ferronordic AB is expected to under-perform the JLT Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Ferronordic AB is 1.62 times less risky than JLT Mobile. The stock trades about -0.1 of its potential returns per unit of risk. The JLT Mobile Computers is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  238.00  in JLT Mobile Computers on December 28, 2024 and sell it today you would lose (8.00) from holding JLT Mobile Computers or give up 3.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

Ferronordic AB  vs.  JLT Mobile Computers

Ferronordic AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ferronordic AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

JLT Mobile Computers

Risk-Adjusted Performance

Very Weak

Over the last 90 days JLT Mobile Computers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, JLT Mobile is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ferronordic and JLT Mobile

The main advantage of trading using opposite Ferronordic and JLT Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferronordic 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.

The idea behind Ferronordic AB and JLT Mobile Computers 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.