Correlation Between NBI Unconstrained and JPMorgan Nasdaq
Can any of the company-specific risk be diversified away by investing in both NBI Unconstrained and JPMorgan Nasdaq 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 NBI Unconstrained and JPMorgan Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI Unconstrained Fixed and JPMorgan Nasdaq Equity, you can compare the effects of market volatilities on NBI Unconstrained and JPMorgan Nasdaq 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 NBI Unconstrained with a short position of JPMorgan Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Unconstrained and JPMorgan Nasdaq.
Diversification Opportunities for NBI Unconstrained and JPMorgan Nasdaq
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NBI and JPMorgan is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding NBI Unconstrained Fixed and JPMorgan Nasdaq Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Nasdaq Equity and NBI Unconstrained 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 NBI Unconstrained Fixed are associated (or correlated) with JPMorgan Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Nasdaq Equity has no effect on the direction of NBI Unconstrained i.e., NBI Unconstrained and JPMorgan Nasdaq go up and down completely randomly.
Pair Corralation between NBI Unconstrained and JPMorgan Nasdaq
Assuming the 90 days trading horizon NBI Unconstrained is expected to generate 4.89 times less return on investment than JPMorgan Nasdaq. But when comparing it to its historical volatility, NBI Unconstrained Fixed is 1.51 times less risky than JPMorgan Nasdaq. It trades about 0.1 of its potential returns per unit of risk. JPMorgan Nasdaq Equity is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,599 in JPMorgan Nasdaq Equity on September 2, 2024 and sell it today you would earn a total of 136.00 from holding JPMorgan Nasdaq Equity or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBI Unconstrained Fixed vs. JPMorgan Nasdaq Equity
Performance |
| Timeline |
| NBI Unconstrained Fixed |
| JPMorgan Nasdaq Equity |
NBI Unconstrained and JPMorgan Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI Unconstrained and JPMorgan Nasdaq
The main advantage of trading using opposite NBI Unconstrained and JPMorgan Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Unconstrained position performs unexpectedly, JPMorgan Nasdaq 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 Nasdaq will offset losses from the drop in JPMorgan Nasdaq's long position.| NBI Unconstrained vs. NBI High Yield | NBI Unconstrained vs. NBI Active Canadian | NBI Unconstrained vs. Picton Mahoney Fortified | NBI Unconstrained vs. NBI Liquid Alternatives |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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