Correlation Between JPMF Global and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both JPMF Global and BNY Mellon 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 JPMF Global and BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMF Global Natural and BNY Mellon Global, you can compare the effects of market volatilities on JPMF Global and BNY Mellon 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 JPMF Global with a short position of BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMF Global and BNY Mellon.
Diversification Opportunities for JPMF Global and BNY Mellon
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between JPMF and BNY is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding JPMF Global Natural and BNY Mellon Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon Global and JPMF Global 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 JPMF Global Natural are associated (or correlated) with BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon Global has no effect on the direction of JPMF Global i.e., JPMF Global and BNY Mellon go up and down completely randomly.
Pair Corralation between JPMF Global and BNY Mellon
Assuming the 90 days trading horizon JPMF Global Natural is expected to generate 2.7 times more return on investment than BNY Mellon. However, JPMF Global is 2.7 times more volatile than BNY Mellon Global. It trades about 0.04 of its potential returns per unit of risk. BNY Mellon Global is currently generating about 0.04 per unit of risk. If you would invest 1,200 in JPMF Global Natural on September 14, 2024 and sell it today you would earn a total of 114.00 from holding JPMF Global Natural or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMF Global Natural vs. BNY Mellon Global
Performance |
| Timeline |
| JPMF Global Natural |
| BNY Mellon Global |
JPMF Global and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMF Global and BNY Mellon
The main advantage of trading using opposite JPMF Global and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMF Global position performs unexpectedly, BNY Mellon 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 BNY Mellon will offset losses from the drop in BNY Mellon's long position.| JPMF Global vs. Groupama Entreprises N | JPMF Global vs. Renaissance Europe C | JPMF Global vs. Superior Plus Corp | JPMF Global vs. Origin Agritech |
| BNY Mellon vs. Lord Abbett Short | BNY Mellon vs. R co Valor F | BNY Mellon vs. Barings Global Umbrella | BNY Mellon vs. iShares Equity Enhanced |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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