Correlation Between JPMorgan Equity and NBI Unconstrained
Can any of the company-specific risk be diversified away by investing in both JPMorgan Equity and NBI Unconstrained 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 Unconstrained 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 Unconstrained Fixed, you can compare the effects of market volatilities on JPMorgan Equity and NBI Unconstrained 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 Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Equity and NBI Unconstrained.
Diversification Opportunities for JPMorgan Equity and NBI Unconstrained
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JPMorgan and NBI is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Equity Premium and NBI Unconstrained Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Unconstrained Fixed 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 Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Unconstrained Fixed has no effect on the direction of JPMorgan Equity i.e., JPMorgan Equity and NBI Unconstrained go up and down completely randomly.
Pair Corralation between JPMorgan Equity and NBI Unconstrained
Assuming the 90 days trading horizon JPMorgan Equity Premium is expected to under-perform the NBI Unconstrained. In addition to that, JPMorgan Equity is 1.92 times more volatile than NBI Unconstrained Fixed. It trades about -0.06 of its total potential returns per unit of risk. NBI Unconstrained Fixed is currently generating about 0.05 per unit of volatility. If you would invest 2,113 in NBI Unconstrained Fixed on November 28, 2024 and sell it today you would earn a total of 6.00 from holding NBI Unconstrained Fixed or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Equity Premium vs. NBI Unconstrained Fixed
Performance |
| Timeline |
| JPMorgan Equity Premium |
| NBI Unconstrained Fixed |
JPMorgan Equity and NBI Unconstrained Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Equity and NBI Unconstrained
The main advantage of trading using opposite JPMorgan Equity and NBI Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Equity position performs unexpectedly, NBI Unconstrained 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 Unconstrained will offset losses from the drop in NBI Unconstrained's long position.| JPMorgan Equity vs. JPMorgan Nasdaq Equity | JPMorgan Equity vs. NBI High Yield | JPMorgan Equity vs. NBI Unconstrained Fixed | JPMorgan Equity vs. Mackenzie Developed ex North |
| NBI Unconstrained vs. NBI High Yield | NBI Unconstrained vs. NBI Active Canadian | NBI Unconstrained vs. Picton Mahoney Fortified | NBI Unconstrained vs. NBI Liquid Alternatives |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |