Correlation Between JPMorgan Emerging and X FAB
Can any of the company-specific risk be diversified away by investing in both JPMorgan Emerging and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on JPMorgan Emerging and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Emerging and X FAB.
Diversification Opportunities for JPMorgan Emerging and X FAB
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between JPMorgan and 0ROZ is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Emerging Markets and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of JPMorgan Emerging i.e., JPMorgan Emerging and X FAB go up and down completely randomly.
Pair Corralation between JPMorgan Emerging and X FAB
Assuming the 90 days trading horizon JPMorgan Emerging is expected to generate 1.71 times less return on investment than X FAB. But when comparing it to its historical volatility, JPMorgan Emerging Markets is 2.79 times less risky than X FAB. It trades about 0.09 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 489.00 in X FAB Silicon Foundries on November 28, 2024 and sell it today you would earn a total of 12.00 from holding X FAB Silicon Foundries or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
JPMorgan Emerging Markets vs. X FAB Silicon Foundries
Performance |
| Timeline |
| JPMorgan Emerging Markets |
| X FAB Silicon |
JPMorgan Emerging and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Emerging and X FAB
The main advantage of trading using opposite JPMorgan Emerging and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Emerging position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| JPMorgan Emerging vs. Fevertree Drinks Plc | JPMorgan Emerging vs. Metals Exploration Plc | JPMorgan Emerging vs. Ebro Foods | JPMorgan Emerging vs. Roebuck Food Group |
| X FAB vs. BlackRock Frontiers Investment | X FAB vs. Mobius Investment Trust | X FAB vs. Lindsell Train Investment | X FAB vs. Livermore Investments Group |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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