Correlation Between JLT MOBILE and NAKED WINES

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

By analyzing existing cross correlation between JLT MOBILE PUTER and NAKED WINES PLC, you can compare the effects of market volatilities on JLT MOBILE and NAKED WINES 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 NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLT MOBILE and NAKED WINES.

Diversification Opportunities for JLT MOBILE and NAKED WINES

0.42

Correlation Coefficient

JLT MOBILE  NAKED WINES

Very weak diversification

The 3 months correlation between JLT and NAKED is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding JLT MOBILE PUTER and NAKED WINES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAKED WINES PLC 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 PUTER are associated (or correlated) with NAKED WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAKED WINES PLC has no effect on the direction of JLT MOBILE i.e., JLT MOBILE and NAKED WINES go up and down completely randomly.

Pair Corralation between JLT MOBILE and NAKED WINES

Assuming the 90 days trading horizon JLT MOBILE PUTER is expected to generate 1.81 times more return on investment than NAKED WINES. However, JLT MOBILE is 1.81 times more volatile than NAKED WINES PLC. It trades about -0.02 of its potential returns per unit of risk. NAKED WINES PLC is currently generating about -0.03 per unit of risk. If you would invest  16.00  in JLT MOBILE PUTER on April 25, 2025 and sell it today you would lose (2.00) from holding JLT MOBILE PUTER or give up 12.5% of portfolio value over 90 days.

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

JLT MOBILE PUTER  vs.  NAKED WINES PLC

JLT MOBILE PUTER

Risk-Adjusted Performance

Very Weak

Over the last 90 days JLT MOBILE PUTER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JLT MOBILE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

NAKED WINES PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days NAKED WINES PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NAKED WINES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JLT MOBILE and NAKED WINES

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

The idea behind JLT MOBILE PUTER and NAKED WINES PLC 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.