Correlation Between Edinburgh Worldwide and JPM Research
Can any of the company-specific risk be diversified away by investing in both Edinburgh Worldwide and JPM Research 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 Edinburgh Worldwide and JPM Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edinburgh Worldwide Investment and JPM Research Enhanced, you can compare the effects of market volatilities on Edinburgh Worldwide and JPM Research 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 Edinburgh Worldwide with a short position of JPM Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edinburgh Worldwide and JPM Research.
Diversification Opportunities for Edinburgh Worldwide and JPM Research
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Edinburgh and JPM is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Edinburgh Worldwide Investment and JPM Research Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM Research Enhanced and Edinburgh Worldwide 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 Edinburgh Worldwide Investment are associated (or correlated) with JPM Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM Research Enhanced has no effect on the direction of Edinburgh Worldwide i.e., Edinburgh Worldwide and JPM Research go up and down completely randomly.
Pair Corralation between Edinburgh Worldwide and JPM Research
Assuming the 90 days trading horizon Edinburgh Worldwide Investment is expected to under-perform the JPM Research. In addition to that, Edinburgh Worldwide is 1.76 times more volatile than JPM Research Enhanced. It trades about -0.26 of its total potential returns per unit of risk. JPM Research Enhanced is currently generating about -0.17 per unit of volatility. If you would invest 272,175 in JPM Research Enhanced on November 28, 2024 and sell it today you would lose (8,150) from holding JPM Research Enhanced or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edinburgh Worldwide Investment vs. JPM Research Enhanced
Performance |
| Timeline |
| Edinburgh Worldwide |
| JPM Research Enhanced |
Edinburgh Worldwide and JPM Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edinburgh Worldwide and JPM Research
The main advantage of trading using opposite Edinburgh Worldwide and JPM Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edinburgh Worldwide position performs unexpectedly, JPM Research 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 Research will offset losses from the drop in JPM Research's long position.| Edinburgh Worldwide vs. BlackRock Latin American | Edinburgh Worldwide vs. VinaCapital Vietnam Opportunity | Edinburgh Worldwide vs. iShares MSCI Japan | Edinburgh Worldwide vs. Amundi EUR High |
| JPM Research vs. Scottish Mortgage Investment | JPM Research vs. VinaCapital Vietnam Opportunity | JPM Research vs. Edinburgh Worldwide Investment | JPM Research vs. Baillie Gifford Growth |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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