Correlation Between Kentima Holding and JLT Mobile

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

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

Diversification Opportunities for Kentima Holding and JLT Mobile

-0.09

Correlation Coefficient

Kentima Holding  JLT Mobile

Good diversification

The 3 months correlation between Kentima and JLT is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kentima Holding publ 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 Kentima Holding 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 Kentima Holding publ 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 Kentima Holding i.e., Kentima Holding and JLT Mobile go up and down completely randomly.

Pair Corralation between Kentima Holding and JLT Mobile

Assuming the 90 days trading horizon Kentima Holding publ is expected to generate 2.51 times more return on investment than JLT Mobile. However, Kentima Holding is 2.51 times more volatile than JLT Mobile Computers. It trades about 0.1 of its potential returns per unit of risk. JLT Mobile Computers is currently generating about -0.07 per unit of risk. If you would invest  169.00  in Kentima Holding publ on September 4, 2024 and sell it today you would earn a total of  41.00  from holding Kentima Holding publ or generate 24.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Kentima Holding publ  vs.  JLT Mobile Computers

Kentima Holding publ

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kentima Holding publ are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Kentima Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 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 Kentima Holding and JLT Mobile

The main advantage of trading using opposite Kentima Holding and JLT Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kentima Holding 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 Kentima Holding publ 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.