Correlation Between JLT Mobile and Avensia Publ

Can any of the company-specific risk be diversified away by investing in both JLT Mobile and Avensia Publ 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 Avensia Publ 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 Avensia publ AB, you can compare the effects of market volatilities on JLT Mobile and Avensia Publ 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 Avensia Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLT Mobile and Avensia Publ.

Diversification Opportunities for JLT Mobile and Avensia Publ

0.75

Correlation Coefficient

JLT Mobile  Avensia Publ

Poor diversification

The 3 months correlation between JLT and Avensia is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and Avensia publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avensia publ AB 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 Avensia Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avensia publ AB has no effect on the direction of JLT Mobile i.e., JLT Mobile and Avensia Publ go up and down completely randomly.

Pair Corralation between JLT Mobile and Avensia Publ

Assuming the 90 days trading horizon JLT Mobile Computers is expected to under-perform the Avensia Publ. But the stock apears to be less risky and, when comparing its historical volatility, JLT Mobile Computers is 1.14 times less risky than Avensia Publ. The stock trades about -0.07 of its potential returns per unit of risk. The Avensia publ AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  938.00  in Avensia publ AB on September 12, 2024 and sell it today you would lose (122.00) from holding Avensia publ AB or give up 13.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

JLT Mobile Computers  vs.  Avensia publ AB

JLT Mobile Computers

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Avensia publ AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avensia publ AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with JLT Mobile and Avensia Publ

The main advantage of trading using opposite JLT Mobile and Avensia Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT Mobile position performs unexpectedly, Avensia Publ 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 Avensia Publ will offset losses from the drop in Avensia Publ's long position.

The idea behind JLT Mobile Computers and Avensia publ AB 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.