Correlation Between Cavotec SA and JLT Mobile

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

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

Diversification Opportunities for Cavotec SA and JLT Mobile

-0.39

Correlation Coefficient

Cavotec SA  JLT Mobile

Very good diversification

The 3 months correlation between Cavotec and JLT is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cavotec SA 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 Cavotec SA 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 Cavotec SA 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 Cavotec SA i.e., Cavotec SA and JLT Mobile go up and down completely randomly.

Pair Corralation between Cavotec SA and JLT Mobile

Assuming the 90 days trading horizon Cavotec SA is expected to generate 1.04 times more return on investment than JLT Mobile. However, Cavotec SA is 1.04 times more volatile than JLT Mobile Computers. It trades about 0.05 of its potential returns per unit of risk. JLT Mobile Computers is currently generating about 0.01 per unit of risk. If you would invest  1,620  in Cavotec SA on April 22, 2025 and sell it today you would earn a total of  140.00  from holding Cavotec SA or generate 8.64% return on investment over 90 days.

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

Cavotec SA  vs.  JLT Mobile Computers

Cavotec SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cavotec SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Cavotec SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Cavotec SA and JLT Mobile

The main advantage of trading using opposite Cavotec SA and JLT Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cavotec SA 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 Cavotec SA 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.