Correlation Between Vonovia SE and Jones Lang

Can any of the company-specific risk be diversified away by investing in both Vonovia SE and Jones Lang 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 Vonovia SE and Jones Lang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vonovia SE ADR and Jones Lang LaSalle, you can compare the effects of market volatilities on Vonovia SE and Jones Lang 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 Vonovia SE with a short position of Jones Lang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vonovia SE and Jones Lang.

Diversification Opportunities for Vonovia SE and Jones Lang

-0.38

Correlation Coefficient

Vonovia SE  Jones Lang

Very good diversification

The 3 months correlation between Vonovia and Jones is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vonovia SE ADR and Jones Lang LaSalle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jones Lang LaSalle and Vonovia SE 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 Vonovia SE ADR are associated (or correlated) with Jones Lang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jones Lang LaSalle has no effect on the direction of Vonovia SE i.e., Vonovia SE and Jones Lang go up and down completely randomly.

Pair Corralation between Vonovia SE and Jones Lang

Assuming the 90 days horizon Vonovia SE is expected to generate 1.26 times less return on investment than Jones Lang. In addition to that, Vonovia SE is 1.18 times more volatile than Jones Lang LaSalle. It trades about 0.04 of its total potential returns per unit of risk. Jones Lang LaSalle is currently generating about 0.06 per unit of volatility. If you would invest  16,713  in Jones Lang LaSalle on September 4, 2024 and sell it today you would earn a total of  11,102  from holding Jones Lang LaSalle or generate 66.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Vonovia SE ADR  vs.  Jones Lang LaSalle

Vonovia SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vonovia SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Vonovia SE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Jones Lang LaSalle

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jones Lang LaSalle are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Jones Lang may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Vonovia SE and Jones Lang

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

The idea behind Vonovia SE ADR and Jones Lang LaSalle 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 Transaction History module to view history of all your transactions and understand their impact on performance.