Correlation Between JLT Mobile and Fractal Gaming

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

Diversification Opportunities for JLT Mobile and Fractal Gaming

0.8

Correlation Coefficient

JLT Mobile  Fractal Gaming

Very poor diversification

The 3 months correlation between JLT and Fractal is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and Fractal Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fractal Gaming Group 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 Fractal Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fractal Gaming Group has no effect on the direction of JLT Mobile i.e., JLT Mobile and Fractal Gaming go up and down completely randomly.

Pair Corralation between JLT Mobile and Fractal Gaming

Assuming the 90 days trading horizon JLT Mobile Computers is expected to under-perform the Fractal Gaming. In addition to that, JLT Mobile is 1.5 times more volatile than Fractal Gaming Group. It trades about -0.18 of its total potential returns per unit of risk. Fractal Gaming Group is currently generating about -0.04 per unit of volatility. If you would invest  3,390  in Fractal Gaming Group on September 12, 2024 and sell it today you would lose (130.00) from holding Fractal Gaming Group or give up 3.83% of portfolio value over 90 days.

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

JLT Mobile Computers  vs.  Fractal Gaming Group

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.

Fractal Gaming Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fractal Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Fractal Gaming is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JLT Mobile and Fractal Gaming

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

The idea behind JLT Mobile Computers and Fractal Gaming Group 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.