Correlation Between HP and Jpmorgan Hedged
Can any of the company-specific risk be diversified away by investing in both HP and Jpmorgan Hedged 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 HP and Jpmorgan Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and Jpmorgan Hedged Equity, you can compare the effects of market volatilities on HP and Jpmorgan Hedged 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 HP with a short position of Jpmorgan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Jpmorgan Hedged.
Diversification Opportunities for HP and Jpmorgan Hedged
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HP and Jpmorgan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Jpmorgan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Hedged Equity and HP 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 HP Inc are associated (or correlated) with Jpmorgan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Hedged Equity has no effect on the direction of HP i.e., HP and Jpmorgan Hedged go up and down completely randomly.
Pair Corralation between HP and Jpmorgan Hedged
Considering the 90-day investment horizon HP Inc is expected to generate 3.86 times more return on investment than Jpmorgan Hedged. However, HP is 3.86 times more volatile than Jpmorgan Hedged Equity. It trades about 0.08 of its potential returns per unit of risk. Jpmorgan Hedged Equity is currently generating about 0.15 per unit of risk. If you would invest 2,768 in HP Inc on August 24, 2024 and sell it today you would earn a total of 1,084 from holding HP Inc or generate 39.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. Jpmorgan Hedged Equity
Performance |
| Timeline |
| HP Inc |
| Jpmorgan Hedged Equity |
HP and Jpmorgan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and Jpmorgan Hedged
The main advantage of trading using opposite HP and Jpmorgan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, Jpmorgan Hedged 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 Hedged will offset losses from the drop in Jpmorgan Hedged's long position.The idea behind HP Inc and Jpmorgan Hedged 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 Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Loomis Sayles Global |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |