Correlation Between JLT Mobile and Ferronordic

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

Diversification Opportunities for JLT Mobile and Ferronordic

-0.17

Correlation Coefficient

JLT Mobile  Ferronordic

Good diversification

The 3 months correlation between JLT and Ferronordic is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic 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 Ferronordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferronordic AB has no effect on the direction of JLT Mobile i.e., JLT Mobile and Ferronordic go up and down completely randomly.

Pair Corralation between JLT Mobile and Ferronordic

Assuming the 90 days trading horizon JLT Mobile Computers is expected to under-perform the Ferronordic. In addition to that, JLT Mobile is 1.75 times more volatile than Ferronordic AB. It trades about -0.05 of its total potential returns per unit of risk. Ferronordic AB is currently generating about 0.05 per unit of volatility. If you would invest  5,820  in Ferronordic AB on December 2, 2024 and sell it today you would earn a total of  280.00  from holding Ferronordic AB or generate 4.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

JLT Mobile Computers  vs.  Ferronordic AB

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 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.

Ferronordic AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ferronordic AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Ferronordic is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JLT Mobile and Ferronordic

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

The idea behind JLT Mobile Computers and Ferronordic 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.