Correlation Between JPMF Global and FF Global
Can any of the company-specific risk be diversified away by investing in both JPMF Global and FF Global 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 FF Global 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 FF Global, you can compare the effects of market volatilities on JPMF Global and FF Global 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 FF Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMF Global and FF Global.
Diversification Opportunities for JPMF Global and FF Global
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMF and FJ2P is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding JPMF Global Natural and FF Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FF 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 FF Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FF Global has no effect on the direction of JPMF Global i.e., JPMF Global and FF Global go up and down completely randomly.
Pair Corralation between JPMF Global and FF Global
Assuming the 90 days trading horizon JPMF Global is expected to generate 3.81 times less return on investment than FF Global. In addition to that, JPMF Global is 1.12 times more volatile than FF Global. It trades about 0.06 of its total potential returns per unit of risk. FF Global is currently generating about 0.24 per unit of volatility. If you would invest 7,198 in FF Global on September 14, 2024 and sell it today you would earn a total of 320.00 from holding FF Global or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMF Global Natural vs. FF Global
Performance |
| Timeline |
| JPMF Global Natural |
| FF Global |
JPMF Global and FF Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMF Global and FF Global
The main advantage of trading using opposite JPMF Global and FF Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMF Global position performs unexpectedly, FF Global 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 FF Global will offset losses from the drop in FF Global'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 |
| FF Global vs. Azvalor Global Value | FF Global vs. JPM Global Natural | FF Global vs. Cobas Global PP | FF Global vs. Aberdeen Global Asian |
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.
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