Correlation Between GM and JPMorgan Global
Can any of the company-specific risk be diversified away by investing in both GM and JPMorgan 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 GM and JPMorgan Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and JPMorgan Global Equity, you can compare the effects of market volatilities on GM and JPMorgan 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 GM with a short position of JPMorgan Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and JPMorgan Global.
Diversification Opportunities for GM and JPMorgan Global
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and JPMorgan is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and JPMorgan Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Global Equity and GM 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 General Motors are associated (or correlated) with JPMorgan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Global Equity has no effect on the direction of GM i.e., GM and JPMorgan Global go up and down completely randomly.
Pair Corralation between GM and JPMorgan Global
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the JPMorgan Global. In addition to that, GM is 3.87 times more volatile than JPMorgan Global Equity. It trades about -0.32 of its total potential returns per unit of risk. JPMorgan Global Equity is currently generating about 0.07 per unit of volatility. If you would invest 5,112 in JPMorgan Global Equity on November 28, 2024 and sell it today you would earn a total of 44.00 from holding JPMorgan Global Equity or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. JPMorgan Global Equity
Performance |
| Timeline |
| General Motors |
| JPMorgan Global Equity |
GM and JPMorgan Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and JPMorgan Global
The main advantage of trading using opposite GM and JPMorgan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, JPMorgan 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 JPMorgan Global will offset losses from the drop in JPMorgan Global's long position.The idea behind General Motors and JPMorgan Global Equity 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 Global vs. JPMorgan Equity Premium | JPMorgan Global vs. JPMorgan Global Research | JPMorgan Global vs. JPMorgan 100Q Equity | JPMorgan Global vs. JPMorgan Global Select |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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