Correlation Between BerolinaCapital Premium and JPM America
Can any of the company-specific risk be diversified away by investing in both BerolinaCapital Premium and JPM America 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 BerolinaCapital Premium and JPM America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BerolinaCapital Premium and JPM America Equity, you can compare the effects of market volatilities on BerolinaCapital Premium and JPM America 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 BerolinaCapital Premium with a short position of JPM America. Check out your portfolio center. Please also check ongoing floating volatility patterns of BerolinaCapital Premium and JPM America.
Diversification Opportunities for BerolinaCapital Premium and JPM America
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BerolinaCapital and JPM is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BerolinaCapital Premium and JPM America Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM America Equity and BerolinaCapital Premium 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 BerolinaCapital Premium are associated (or correlated) with JPM America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM America Equity has no effect on the direction of BerolinaCapital Premium i.e., BerolinaCapital Premium and JPM America go up and down completely randomly.
Pair Corralation between BerolinaCapital Premium and JPM America
Assuming the 90 days trading horizon BerolinaCapital Premium is expected to generate 8.74 times less return on investment than JPM America. But when comparing it to its historical volatility, BerolinaCapital Premium is 1.17 times less risky than JPM America. It trades about 0.03 of its potential returns per unit of risk. JPM America Equity is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 41,364 in JPM America Equity on August 30, 2024 and sell it today you would earn a total of 2,977 from holding JPM America Equity or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
BerolinaCapital Premium vs. JPM America Equity
Performance |
| Timeline |
| BerolinaCapital Premium |
| JPM America Equity |
BerolinaCapital Premium and JPM America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BerolinaCapital Premium and JPM America
The main advantage of trading using opposite BerolinaCapital Premium and JPM America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BerolinaCapital Premium position performs unexpectedly, JPM America 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 America will offset losses from the drop in JPM America's long position.| BerolinaCapital Premium vs. Renaissance Europe C | BerolinaCapital Premium vs. Superior Plus Corp | BerolinaCapital Premium vs. Origin Agritech | BerolinaCapital Premium vs. Identiv |
| JPM America vs. Renaissance Europe C | JPM America vs. Superior Plus Corp | JPM America vs. Origin Agritech | JPM America vs. Identiv |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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