Correlation Between Astar and Jpmorgan
Can any of the company-specific risk be diversified away by investing in both Astar and Jpmorgan 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 Astar and Jpmorgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Jpmorgan Small Pany, you can compare the effects of market volatilities on Astar and Jpmorgan 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 Astar with a short position of Jpmorgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Jpmorgan.
Diversification Opportunities for Astar and Jpmorgan
Very weak diversification
The 3 months correlation between Astar and Jpmorgan is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Jpmorgan Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Small Pany and Astar 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 Astar are associated (or correlated) with Jpmorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Small Pany has no effect on the direction of Astar i.e., Astar and Jpmorgan go up and down completely randomly.
Pair Corralation between Astar and Jpmorgan
Assuming the 90 days trading horizon Astar is expected to generate 5.01 times more return on investment than Jpmorgan. However, Astar is 5.01 times more volatile than Jpmorgan Small Pany. It trades about 0.09 of its potential returns per unit of risk. Jpmorgan Small Pany is currently generating about 0.12 per unit of risk. If you would invest 5.92 in Astar on October 21, 2024 and sell it today you would earn a total of 0.44 from holding Astar or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Astar vs. Jpmorgan Small Pany
Performance |
| Timeline |
| Astar |
| Jpmorgan Small Pany |
Astar and Jpmorgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Jpmorgan
The main advantage of trading using opposite Astar and Jpmorgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Jpmorgan 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 Jpmorgan will offset losses from the drop in Jpmorgan's long position.The idea behind Astar and Jpmorgan Small Pany 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.| Jpmorgan vs. International Investors Gold | Jpmorgan vs. Global Gold Fund | Jpmorgan vs. Fidelity Advisor Gold | Jpmorgan vs. Goldman Sachs Short |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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