Correlation Between JPX Global and BQE Water
Can any of the company-specific risk be diversified away by investing in both JPX Global and BQE Water 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 JPX Global and BQE Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPX Global and BQE Water, you can compare the effects of market volatilities on JPX Global and BQE Water 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 JPX Global with a short position of BQE Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPX Global and BQE Water.
Diversification Opportunities for JPX Global and BQE Water
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between JPX and BQE is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding JPX Global and BQE Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BQE Water and JPX 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 JPX Global are associated (or correlated) with BQE Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BQE Water has no effect on the direction of JPX Global i.e., JPX Global and BQE Water go up and down completely randomly.
Pair Corralation between JPX Global and BQE Water
Given the investment horizon of 90 days JPX Global is expected to generate 12.88 times more return on investment than BQE Water. However, JPX Global is 12.88 times more volatile than BQE Water. It trades about 0.11 of its potential returns per unit of risk. BQE Water is currently generating about 0.06 per unit of risk. If you would invest 0.07 in JPX Global on August 29, 2024 and sell it today you would lose (0.06) from holding JPX Global or give up 85.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
JPX Global vs. BQE Water
Performance |
| Timeline |
| JPX Global |
| BQE Water |
JPX Global and BQE Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPX Global and BQE Water
The main advantage of trading using opposite JPX Global and BQE Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPX Global position performs unexpectedly, BQE Water 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 BQE Water will offset losses from the drop in BQE Water's long position.| JPX Global vs. Houston Natural Resources | JPX Global vs. Ecosciences | JPX Global vs. Ecoloclean Industrs | JPX Global vs. Garb Oil Pwr |
| BQE Water vs. Deere Company | BQE Water vs. Columbus McKinnon | BQE Water vs. Hyster Yale Materials Handling | BQE Water vs. Manitowoc |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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