Correlation Between Jpmorgan Equity and Cullen Enhanced
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Equity and Cullen Enhanced 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 Cullen Enhanced 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 Cullen Enhanced Equity, you can compare the effects of market volatilities on Jpmorgan Equity and Cullen Enhanced 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 Cullen Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Equity and Cullen Enhanced.
Diversification Opportunities for Jpmorgan Equity and Cullen Enhanced
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jpmorgan and Cullen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Premium and Cullen Enhanced Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Enhanced Equity 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 Cullen Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Enhanced Equity has no effect on the direction of Jpmorgan Equity i.e., Jpmorgan Equity and Cullen Enhanced go up and down completely randomly.
Pair Corralation between Jpmorgan Equity and Cullen Enhanced
Assuming the 90 days horizon Jpmorgan Equity Premium is expected to generate 0.81 times more return on investment than Cullen Enhanced. However, Jpmorgan Equity Premium is 1.23 times less risky than Cullen Enhanced. It trades about 0.09 of its potential returns per unit of risk. Cullen Enhanced Equity is currently generating about 0.04 per unit of risk. If you would invest 1,196 in Jpmorgan Equity Premium on August 26, 2024 and sell it today you would earn a total of 297.00 from holding Jpmorgan Equity Premium or generate 24.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Equity Premium vs. Cullen Enhanced Equity
Performance |
| Timeline |
| Jpmorgan Equity Premium |
| Cullen Enhanced Equity |
Jpmorgan Equity and Cullen Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Equity and Cullen Enhanced
The main advantage of trading using opposite Jpmorgan Equity and Cullen Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Equity position performs unexpectedly, Cullen Enhanced 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 Cullen Enhanced will offset losses from the drop in Cullen Enhanced's long position.| Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 | Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 | Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 | Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 |
| Cullen Enhanced vs. Cullen Small Cap | Cullen Enhanced vs. Cullen Small Cap | Cullen Enhanced vs. Cullen Small Cap | Cullen Enhanced vs. Cullen Value Fund |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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