Correlation Between JP Morgan and Affinity World
Can any of the company-specific risk be diversified away by investing in both JP Morgan and Affinity World 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 JP Morgan and Affinity World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JP Morgan Exchange Traded and Affinity World Leaders, you can compare the effects of market volatilities on JP Morgan and Affinity World 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 JP Morgan with a short position of Affinity World. Check out your portfolio center. Please also check ongoing floating volatility patterns of JP Morgan and Affinity World.
Diversification Opportunities for JP Morgan and Affinity World
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between JDIV and Affinity is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Exchange Traded and Affinity World Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity World Leaders and JP Morgan 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 JP Morgan Exchange Traded are associated (or correlated) with Affinity World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affinity World Leaders has no effect on the direction of JP Morgan i.e., JP Morgan and Affinity World go up and down completely randomly.
Pair Corralation between JP Morgan and Affinity World
Given the investment horizon of 90 days JP Morgan Exchange Traded is expected to under-perform the Affinity World. But the etf apears to be less risky and, when comparing its historical volatility, JP Morgan Exchange Traded is 1.62 times less risky than Affinity World. The etf trades about -0.05 of its potential returns per unit of risk. The Affinity World Leaders is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,305 in Affinity World Leaders on August 30, 2024 and sell it today you would earn a total of 159.00 from holding Affinity World Leaders or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JP Morgan Exchange Traded vs. Affinity World Leaders
Performance |
| Timeline |
| JP Morgan Exchange |
| Affinity World Leaders |
JP Morgan and Affinity World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JP Morgan and Affinity World
The main advantage of trading using opposite JP Morgan and Affinity World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JP Morgan position performs unexpectedly, Affinity World 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 Affinity World will offset losses from the drop in Affinity World's long position.| JP Morgan vs. FT Vest Equity | JP Morgan vs. Zillow Group Class | JP Morgan vs. Northern Lights | JP Morgan vs. VanEck Vectors Moodys |
| Affinity World vs. FCF International Quality | Affinity World vs. American Century STOXX | Affinity World vs. PIMCO RAFI Dynamic | Affinity World vs. ProShares SP 500 |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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