Correlation Between JPMorgan Equity and NBI High
Can any of the company-specific risk be diversified away by investing in both JPMorgan Equity and NBI High 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 JPMorgan Equity and NBI High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Equity Premium and NBI High Yield, you can compare the effects of market volatilities on JPMorgan Equity and NBI High 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 JPMorgan Equity with a short position of NBI High. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Equity and NBI High.
Diversification Opportunities for JPMorgan Equity and NBI High
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between JPMorgan and NBI is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Equity Premium and NBI High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI High Yield and JPMorgan Equity 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 JPMorgan Equity Premium are associated (or correlated) with NBI High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI High Yield has no effect on the direction of JPMorgan Equity i.e., JPMorgan Equity and NBI High go up and down completely randomly.
Pair Corralation between JPMorgan Equity and NBI High
Assuming the 90 days trading horizon JPMorgan Equity Premium is expected to generate 2.15 times more return on investment than NBI High. However, JPMorgan Equity is 2.15 times more volatile than NBI High Yield. It trades about 0.31 of its potential returns per unit of risk. NBI High Yield is currently generating about 0.1 per unit of risk. If you would invest 2,582 in JPMorgan Equity Premium on August 30, 2024 and sell it today you would earn a total of 117.00 from holding JPMorgan Equity Premium or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Equity Premium vs. NBI High Yield
Performance |
| Timeline |
| JPMorgan Equity Premium |
| NBI High Yield |
JPMorgan Equity and NBI High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Equity and NBI High
The main advantage of trading using opposite JPMorgan Equity and NBI High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Equity position performs unexpectedly, NBI High 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 NBI High will offset losses from the drop in NBI High's long position.| JPMorgan Equity vs. BMO Low Volatility | JPMorgan Equity vs. BMO Equal Weight | JPMorgan Equity vs. BMO Dividend ETF | JPMorgan Equity vs. BMO Global Infrastructure |
| NBI High vs. iShares SPTSX 60 | NBI High vs. iShares Core SP | NBI High vs. iShares Core SPTSX | NBI High vs. BMO Aggregate Bond |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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