Correlation Between 3i Group and Jones Lang

Can any of the company-specific risk be diversified away by investing in both 3i Group 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 3i Group and Jones Lang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3i Group PLC and Jones Lang LaSalle, you can compare the effects of market volatilities on 3i Group 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 3i Group with a short position of Jones Lang. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3i Group and Jones Lang.

Diversification Opportunities for 3i Group and Jones Lang

0.54

Correlation Coefficient

3i Group  Jones Lang

Very weak diversification

The 3 months correlation between TGOPY and Jones is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding 3i Group PLC 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 3i Group 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 3i Group PLC 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 3i Group i.e., 3i Group and Jones Lang go up and down completely randomly.

Pair Corralation between 3i Group and Jones Lang

Assuming the 90 days horizon 3i Group PLC is expected to under-perform the Jones Lang. But the pink sheet apears to be less risky and, when comparing its historical volatility, 3i Group PLC is 1.12 times less risky than Jones Lang. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Jones Lang LaSalle is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  22,988  in Jones Lang LaSalle on May 6, 2025 and sell it today you would earn a total of  3,547  from holding Jones Lang LaSalle or generate 15.43% return on investment over 90 days.

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

3i Group PLC  vs.  Jones Lang LaSalle

3i Group PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days 3i Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, 3i Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jones Lang LaSalle

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jones Lang LaSalle are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Jones Lang disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 3i Group and Jones Lang

The main advantage of trading using opposite 3i Group and Jones Lang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3i Group 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 3i Group PLC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.