Correlation Between JPX Global and Blue Water
Can any of the company-specific risk be diversified away by investing in both JPX Global and Blue 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 Blue 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 Blue Water Petroleum, you can compare the effects of market volatilities on JPX Global and Blue 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 Blue Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPX Global and Blue Water.
Diversification Opportunities for JPX Global and Blue Water
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JPX and Blue is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding JPX Global and Blue Water Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Water Petroleum 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 Blue Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Water Petroleum has no effect on the direction of JPX Global i.e., JPX Global and Blue Water go up and down completely randomly.
Pair Corralation between JPX Global and Blue Water
Given the investment horizon of 90 days JPX Global is expected to generate 4.35 times more return on investment than Blue Water. However, JPX Global is 4.35 times more volatile than Blue Water Petroleum. It trades about 0.11 of its potential returns per unit of risk. Blue Water Petroleum is currently generating about 0.01 per unit of risk. If you would invest 0.04 in JPX Global on September 1, 2024 and sell it today you would lose (0.03) from holding JPX Global or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
JPX Global vs. Blue Water Petroleum
Performance |
| Timeline |
| JPX Global |
| Blue Water Petroleum |
JPX Global and Blue Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPX Global and Blue Water
The main advantage of trading using opposite JPX Global and Blue Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPX Global position performs unexpectedly, Blue 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 Blue Water will offset losses from the drop in Blue Water's long position.| JPX Global vs. Seychelle Environmtl | JPX Global vs. Energy and Water | JPX Global vs. One World Universe | JPX Global vs. Vow ASA |
| Blue Water vs. Petroleo Brasileiro Petrobras | Blue Water vs. Equinor ASA ADR | Blue Water vs. Eni SpA ADR | Blue Water vs. YPF Sociedad Anonima |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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