Correlation Between Jpmorgan Emerging and Aberdeen China
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Emerging and Aberdeen China 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 Emerging and Aberdeen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Emerging Markets and Aberdeen China Oppty, you can compare the effects of market volatilities on Jpmorgan Emerging and Aberdeen China 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 Emerging with a short position of Aberdeen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Emerging and Aberdeen China.
Diversification Opportunities for Jpmorgan Emerging and Aberdeen China
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMORGAN and Aberdeen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Emerging Markets and Aberdeen China Oppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen China Oppty and Jpmorgan Emerging 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 Emerging Markets are associated (or correlated) with Aberdeen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen China Oppty has no effect on the direction of Jpmorgan Emerging i.e., Jpmorgan Emerging and Aberdeen China go up and down completely randomly.
Pair Corralation between Jpmorgan Emerging and Aberdeen China
Assuming the 90 days horizon Jpmorgan Emerging Markets is expected to generate 0.38 times more return on investment than Aberdeen China. However, Jpmorgan Emerging Markets is 2.64 times less risky than Aberdeen China. It trades about -0.21 of its potential returns per unit of risk. Aberdeen China Oppty is currently generating about -0.08 per unit of risk. If you would invest 3,048 in Jpmorgan Emerging Markets on September 4, 2024 and sell it today you would lose (100.00) from holding Jpmorgan Emerging Markets or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Emerging Markets vs. Aberdeen China Oppty
Performance |
| Timeline |
| Jpmorgan Emerging Markets |
| Aberdeen China Oppty |
Jpmorgan Emerging and Aberdeen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Emerging and Aberdeen China
The main advantage of trading using opposite Jpmorgan Emerging and Aberdeen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Emerging position performs unexpectedly, Aberdeen China 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 Aberdeen China will offset losses from the drop in Aberdeen China's long position.| Jpmorgan Emerging vs. Goldman Sachs Real | Jpmorgan Emerging vs. Fidelity Real Estate | Jpmorgan Emerging vs. Jhancock Real Estate | Jpmorgan Emerging vs. Amg Managers Centersquare |
| Aberdeen China vs. Legg Mason Partners | Aberdeen China vs. Transamerica Emerging Markets | Aberdeen China vs. Barings Emerging Markets | Aberdeen China vs. Templeton Emerging Markets |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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