Correlation Between CM AM and JPM Europe
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By analyzing existing cross correlation between CM AM Monplus NE and JPM Europe Small, you can compare the effects of market volatilities on CM AM and JPM Europe 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 CM AM with a short position of JPM Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM AM and JPM Europe.
Diversification Opportunities for CM AM and JPM Europe
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0P0001F96C and JPM is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding CM AM Monplus NE and JPM Europe Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM Europe Small and CM AM 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 CM AM Monplus NE are associated (or correlated) with JPM Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM Europe Small has no effect on the direction of CM AM i.e., CM AM and JPM Europe go up and down completely randomly.
Pair Corralation between CM AM and JPM Europe
Assuming the 90 days trading horizon CM AM is expected to generate 3.46 times less return on investment than JPM Europe. But when comparing it to its historical volatility, CM AM Monplus NE is 79.75 times less risky than JPM Europe. It trades about 1.46 of its potential returns per unit of risk. JPM Europe Small is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,359 in JPM Europe Small on November 28, 2024 and sell it today you would earn a total of 1,074 from holding JPM Europe Small or generate 12.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 51.4% |
| Values | Daily Returns |
CM AM Monplus NE vs. JPM Europe Small
Performance |
| Timeline |
| CM AM Monplus |
| JPM Europe Small |
CM AM and JPM Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM AM and JPM Europe
The main advantage of trading using opposite CM AM and JPM Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM AM position performs unexpectedly, JPM Europe 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 JPM Europe will offset losses from the drop in JPM Europe's long position.The idea behind CM AM Monplus NE and JPM Europe Small 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.| JPM Europe vs. Groupama Entreprises N | JPM Europe vs. Renaissance Europe C | JPM Europe vs. Superior Plus Corp | JPM Europe vs. Origin Agritech |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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