Correlation Between Energy Fund and Jpmorgan Emerging
Can any of the company-specific risk be diversified away by investing in both Energy Fund 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 Energy Fund and Jpmorgan Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Fund Class and Jpmorgan Emerging Markets, you can compare the effects of market volatilities on Energy Fund 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 Energy Fund with a short position of Jpmorgan Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Fund and Jpmorgan Emerging.
Diversification Opportunities for Energy Fund and Jpmorgan Emerging
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Energy and JPMORGAN is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Energy Fund Class 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 Energy Fund 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 Energy Fund Class 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 Energy Fund i.e., Energy Fund and Jpmorgan Emerging go up and down completely randomly.
Pair Corralation between Energy Fund and Jpmorgan Emerging
Assuming the 90 days horizon Energy Fund Class is expected to generate 1.47 times more return on investment than Jpmorgan Emerging. However, Energy Fund is 1.47 times more volatile than Jpmorgan Emerging Markets. It trades about 0.02 of its potential returns per unit of risk. Jpmorgan Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 19,611 in Energy Fund Class on September 3, 2024 and sell it today you would earn a total of 1,607 from holding Energy Fund Class or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Fund Class vs. Jpmorgan Emerging Markets
Performance |
| Timeline |
| Energy Fund Class |
| Jpmorgan Emerging Markets |
Energy Fund and Jpmorgan Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Fund and Jpmorgan Emerging
The main advantage of trading using opposite Energy Fund and Jpmorgan Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Fund 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.| Energy Fund vs. Jpmorgan Emerging Markets | Energy Fund vs. Fundvantage Trust | Energy Fund vs. Templeton Developing Markets | Energy Fund vs. Massmutual Select Diversified |
| Jpmorgan Emerging vs. Franklin Mutual Global | Jpmorgan Emerging vs. Templeton Growth Fund | Jpmorgan Emerging vs. Franklin Real Estate | Jpmorgan Emerging vs. HUMANA INC |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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