Correlation Between JLT Mobile and Swedbank

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

Diversification Opportunities for JLT Mobile and Swedbank

-0.47

Correlation Coefficient

JLT Mobile  Swedbank

Very good diversification

The 3 months correlation between JLT and Swedbank is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank 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 Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of JLT Mobile i.e., JLT Mobile and Swedbank go up and down completely randomly.

Pair Corralation between JLT Mobile and Swedbank

Assuming the 90 days trading horizon JLT Mobile Computers is expected to under-perform the Swedbank. In addition to that, JLT Mobile is 2.64 times more volatile than Swedbank AB. It trades about 0.0 of its total potential returns per unit of risk. Swedbank AB is currently generating about 0.19 per unit of volatility. If you would invest  19,977  in Swedbank AB on December 30, 2024 and sell it today you would earn a total of  3,213  from holding Swedbank AB or generate 16.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

JLT Mobile Computers  vs.  Swedbank 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 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.

Swedbank AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Swedbank sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JLT Mobile and Swedbank

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

The idea behind JLT Mobile Computers and Swedbank 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.