Correlation Between JPM Global and BGF Global
Can any of the company-specific risk be diversified away by investing in both JPM Global and BGF 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 JPM Global and BGF Global 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 BGF Global Allocation, you can compare the effects of market volatilities on JPM Global and BGF 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 JPM Global with a short position of BGF Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPM Global and BGF Global.
Diversification Opportunities for JPM Global and BGF Global
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between JPM and BGF is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding JPM Global Natural and BGF Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Global Allocation 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 BGF Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Global Allocation has no effect on the direction of JPM Global i.e., JPM Global and BGF Global go up and down completely randomly.
Pair Corralation between JPM Global and BGF Global
Assuming the 90 days trading horizon JPM Global Natural is expected to generate 1.62 times more return on investment than BGF Global. However, JPM Global is 1.62 times more volatile than BGF Global Allocation. It trades about 0.27 of its potential returns per unit of risk. BGF Global Allocation is currently generating about 0.19 per unit of risk. If you would invest 2,020 in JPM Global Natural on November 2, 2024 and sell it today you would earn a total of 105.00 from holding JPM Global Natural or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPM Global Natural vs. BGF Global Allocation
Performance |
| Timeline |
| JPM Global Natural |
| BGF Global Allocation |
JPM Global and BGF Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPM Global and BGF Global
The main advantage of trading using opposite JPM Global and BGF Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPM Global position performs unexpectedly, BGF 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 BGF Global will offset losses from the drop in BGF Global's long position.| JPM Global vs. Groupama Entreprises N | JPM Global vs. Renaissance Europe C | JPM Global vs. Superior Plus Corp | JPM Global vs. Origin Agritech |
| BGF Global vs. Groupama Entreprises N | BGF Global vs. Renaissance Europe C | BGF Global vs. Superior Plus Corp | BGF Global vs. Origin Agritech |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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