Correlation Between JPM Global and Templeton Global
Can any of the company-specific risk be diversified away by investing in both JPM Global and Templeton 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 Templeton 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 Templeton Global AD, you can compare the effects of market volatilities on JPM Global and Templeton 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 Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPM Global and Templeton Global.
Diversification Opportunities for JPM Global and Templeton Global
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPM and Templeton is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding JPM Global Natural and Templeton Global AD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global 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 Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global has no effect on the direction of JPM Global i.e., JPM Global and Templeton Global go up and down completely randomly.
Pair Corralation between JPM Global and Templeton Global
Assuming the 90 days trading horizon JPM Global is expected to generate 1.13 times less return on investment than Templeton Global. In addition to that, JPM Global is 1.46 times more volatile than Templeton Global AD. It trades about 0.03 of its total potential returns per unit of risk. Templeton Global AD is currently generating about 0.05 per unit of volatility. If you would invest 2,918 in Templeton Global AD on December 4, 2024 and sell it today you would earn a total of 21.00 from holding Templeton Global AD or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPM Global Natural vs. Templeton Global AD
Performance |
| Timeline |
| JPM Global Natural |
| Templeton Global |
JPM Global and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPM Global and Templeton Global
The main advantage of trading using opposite JPM Global and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPM Global position performs unexpectedly, Templeton 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 Templeton Global will offset losses from the drop in Templeton Global's long position.| JPM Global vs. AXA World Funds | JPM Global vs. Swedbank Robur Corporate | JPM Global vs. Algebris UCITS Funds | JPM Global vs. BGF World Gold |
| Templeton Global vs. Azvalor Global Value | Templeton Global vs. JPM Global Natural | Templeton Global vs. Cobas Global PP | Templeton Global vs. JPMF Global Natural |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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