Correlation Between Nam Tai and Jones Lang
Can any of the company-specific risk be diversified away by investing in both Nam Tai 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 Nam Tai and Jones Lang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nam Tai Property and Jones Lang LaSalle, you can compare the effects of market volatilities on Nam Tai 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 Nam Tai with a short position of Jones Lang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Tai and Jones Lang.
Diversification Opportunities for Nam Tai and Jones Lang
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nam and Jones is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nam Tai Property 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 Nam Tai 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 Nam Tai Property 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 Nam Tai i.e., Nam Tai and Jones Lang go up and down completely randomly.
Pair Corralation between Nam Tai and Jones Lang
Considering the 90-day investment horizon Nam Tai Property is expected to generate 6.52 times more return on investment than Jones Lang. However, Nam Tai is 6.52 times more volatile than Jones Lang LaSalle. It trades about 0.0 of its potential returns per unit of risk. Jones Lang LaSalle is currently generating about 0.01 per unit of risk. If you would invest 422.00 in Nam Tai Property on January 26, 2024 and sell it today you would lose (280.00) from holding Nam Tai Property or give up 66.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.87% |
| Values | Daily Returns |
Nam Tai Property vs. Jones Lang LaSalle
Performance |
| Timeline |
| Nam Tai Property |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jones Lang LaSalle |
Nam Tai and Jones Lang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Tai and Jones Lang
The main advantage of trading using opposite Nam Tai and Jones Lang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Tai 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.| Nam Tai vs. National CineMedia | Nam Tai vs. HF Sinclair Corp | Nam Tai vs. Corporacion America Airports | Nam Tai vs. Getty Images Holdings |
Check out your portfolio center.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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