Correlation Between NYSE Composite and Jpmorgan Emerging
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Jpmorgan Emerging 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 NYSE Composite and Jpmorgan Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Jpmorgan Emerging Markets, you can compare the effects of market volatilities on NYSE Composite and Jpmorgan Emerging 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 NYSE Composite with a short position of Jpmorgan Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Jpmorgan Emerging.
Diversification Opportunities for NYSE Composite and Jpmorgan Emerging
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Jpmorgan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Jpmorgan Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Emerging Markets and NYSE Composite 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 NYSE Composite are associated (or correlated) with Jpmorgan Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Emerging Markets has no effect on the direction of NYSE Composite i.e., NYSE Composite and Jpmorgan Emerging go up and down completely randomly.
Pair Corralation between NYSE Composite and Jpmorgan Emerging
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.64 times more return on investment than Jpmorgan Emerging. However, NYSE Composite is 1.56 times less risky than Jpmorgan Emerging. It trades about -0.07 of its potential returns per unit of risk. Jpmorgan Emerging Markets is currently generating about -0.09 per unit of risk. If you would invest 2,001,587 in NYSE Composite on September 12, 2024 and sell it today you would lose (13,397) from holding NYSE Composite or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Jpmorgan Emerging Markets
Performance |
| Timeline |
NYSE Composite and Jpmorgan Emerging Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Jpmorgan Emerging Markets
Pair trading matchups for Jpmorgan Emerging
Pair Trading with NYSE Composite and Jpmorgan Emerging
The main advantage of trading using opposite NYSE Composite and Jpmorgan Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Jpmorgan Emerging 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 Emerging will offset losses from the drop in Jpmorgan Emerging's long position.| NYSE Composite vs. Teleflex Incorporated | NYSE Composite vs. Victorias Secret Co | NYSE Composite vs. Under Armour C | NYSE Composite vs. Steven Madden |
| Jpmorgan Emerging vs. T Rowe Price | Jpmorgan Emerging vs. Aqr Long Short Equity | Jpmorgan Emerging vs. Kinetics Market Opportunities | Jpmorgan Emerging vs. Artisan Emerging Markets |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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