Correlation Between JLT Mobile and Svenska Handelsbanken

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

Diversification Opportunities for JLT Mobile and Svenska Handelsbanken

-0.85
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between JLT and Svenska is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding JLT Mobile Computers and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken 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 Svenska Handelsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Handelsbanken has no effect on the direction of JLT Mobile i.e., JLT Mobile and Svenska Handelsbanken go up and down completely randomly.

Pair Corralation between JLT Mobile and Svenska Handelsbanken

Assuming the 90 days trading horizon JLT Mobile Computers is expected to under-perform the Svenska Handelsbanken. In addition to that, JLT Mobile is 1.41 times more volatile than Svenska Handelsbanken AB. It trades about -0.09 of its total potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about 0.15 per unit of volatility. If you would invest  13,410  in Svenska Handelsbanken AB on September 5, 2024 and sell it today you would earn a total of  1,710  from holding Svenska Handelsbanken AB or generate 12.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

JLT Mobile Computers  vs.  Svenska Handelsbanken AB

 Performance 
       Timeline  
JLT Mobile Computers 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Svenska Handelsbanken 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Svenska Handelsbanken AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Svenska Handelsbanken may actually be approaching a critical reversion point that can send shares even higher in January 2025.

JLT Mobile and Svenska Handelsbanken Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JLT Mobile and Svenska Handelsbanken

The main advantage of trading using opposite JLT Mobile and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT Mobile position performs unexpectedly, Svenska Handelsbanken 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 Svenska Handelsbanken will offset losses from the drop in Svenska Handelsbanken's long position.
The idea behind JLT Mobile Computers and Svenska Handelsbanken 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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