Correlation Between International Equity and Jpmorgan
Can any of the company-specific risk be diversified away by investing in both International Equity and Jpmorgan 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 International Equity and Jpmorgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Equity Portfolio and Jpmorgan Equity Fund, you can compare the effects of market volatilities on International Equity and Jpmorgan 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 International Equity with a short position of Jpmorgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Equity and Jpmorgan.
Diversification Opportunities for International Equity and Jpmorgan
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and Jpmorgan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding International Equity Portfolio and Jpmorgan Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Equity and International Equity 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 International Equity Portfolio are associated (or correlated) with Jpmorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Equity has no effect on the direction of International Equity i.e., International Equity and Jpmorgan go up and down completely randomly.
Pair Corralation between International Equity and Jpmorgan
Assuming the 90 days horizon International Equity Portfolio is expected to under-perform the Jpmorgan. But the mutual fund apears to be less risky and, when comparing its historical volatility, International Equity Portfolio is 1.02 times less risky than Jpmorgan. The mutual fund trades about -0.22 of its potential returns per unit of risk. The Jpmorgan Equity Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,492 in Jpmorgan Equity Fund on August 30, 2024 and sell it today you would earn a total of 65.00 from holding Jpmorgan Equity Fund or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Equity Portfolio vs. Jpmorgan Equity Fund
Performance |
| Timeline |
| International Equity |
| Jpmorgan Equity |
International Equity and Jpmorgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Equity and Jpmorgan
The main advantage of trading using opposite International Equity and Jpmorgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Equity position performs unexpectedly, Jpmorgan 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 Jpmorgan will offset losses from the drop in Jpmorgan's long position.| International Equity vs. T Rowe Price | International Equity vs. Causeway International Value | International Equity vs. Short Term Fund Administrative | International Equity vs. Miller Opportunity Trust |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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