Correlation Between JPM Global and JPM America
Can any of the company-specific risk be diversified away by investing in both JPM Global and JPM America 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 JPM Global and JPM America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPM Global Natural and JPM America Equity, you can compare the effects of market volatilities on JPM Global and JPM America 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 JPM Global with a short position of JPM America. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPM Global and JPM America.
Diversification Opportunities for JPM Global and JPM America
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between JPM and JPM is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding JPM Global Natural and JPM America Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM America Equity and JPM 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 JPM Global Natural are associated (or correlated) with JPM America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM America Equity has no effect on the direction of JPM Global i.e., JPM Global and JPM America go up and down completely randomly.
Pair Corralation between JPM Global and JPM America
Assuming the 90 days trading horizon JPM Global is expected to generate 1.72 times less return on investment than JPM America. In addition to that, JPM Global is 1.11 times more volatile than JPM America Equity. It trades about 0.05 of its total potential returns per unit of risk. JPM America Equity is currently generating about 0.09 per unit of volatility. If you would invest 36,013 in JPM America Equity on November 19, 2024 and sell it today you would earn a total of 8,396 from holding JPM America Equity or generate 23.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
JPM Global Natural vs. JPM America Equity
Performance |
| Timeline |
| JPM Global Natural |
| JPM America Equity |
JPM Global and JPM America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPM Global and JPM America
The main advantage of trading using opposite JPM Global and JPM America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPM Global position performs unexpectedly, JPM America 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 JPM America will offset losses from the drop in JPM America's long position.| JPM Global vs. Renaissance Europe C | JPM Global vs. Superior Plus Corp | JPM Global vs. Origin Agritech | JPM Global vs. Identiv |
| JPM America vs. iShares Equity Enhanced | JPM America vs. Esfera Robotics R | JPM America vs. R co Valor F | JPM America vs. CM AM Monplus NE |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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