Correlation Between FF Global and JPM Global
Can any of the company-specific risk be diversified away by investing in both FF Global and JPM Global 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 FF Global and JPM Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FF Global and JPM Global Natural, you can compare the effects of market volatilities on FF Global and JPM Global 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 FF Global with a short position of JPM Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of FF Global and JPM Global.
Diversification Opportunities for FF Global and JPM Global
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FJ2P and JPM is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding FF Global and JPM Global Natural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM Global Natural and FF Global 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 FF Global are associated (or correlated) with JPM Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM Global Natural has no effect on the direction of FF Global i.e., FF Global and JPM Global go up and down completely randomly.
Pair Corralation between FF Global and JPM Global
Assuming the 90 days trading horizon FF Global is expected to under-perform the JPM Global. In addition to that, FF Global is 1.29 times more volatile than JPM Global Natural. It trades about -0.01 of its total potential returns per unit of risk. JPM Global Natural is currently generating about 0.78 per unit of volatility. If you would invest 1,993 in JPM Global Natural on October 21, 2024 and sell it today you would earn a total of 195.00 from holding JPM Global Natural or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FF Global vs. JPM Global Natural
Performance |
| Timeline |
| FF Global |
| JPM Global Natural |
FF Global and JPM Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FF Global and JPM Global
The main advantage of trading using opposite FF Global and JPM Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FF Global position performs unexpectedly, JPM Global 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 Global will offset losses from the drop in JPM Global's long position.| FF Global vs. Groupama Entreprises N | FF Global vs. Renaissance Europe C | FF Global vs. Superior Plus Corp | FF Global vs. Intel |
| JPM Global vs. Groupama Entreprises N | JPM Global vs. Renaissance Europe C | JPM Global vs. Superior Plus Corp | JPM Global vs. Intel |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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