Correlation Between Commodities Strategy and Jpmorgan Emerging
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy 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 Commodities Strategy and Jpmorgan Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Jpmorgan Emerging Markets, you can compare the effects of market volatilities on Commodities Strategy 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 Commodities Strategy with a short position of Jpmorgan Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Jpmorgan Emerging.
Diversification Opportunities for Commodities Strategy and Jpmorgan Emerging
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Commodities and JPMORGAN is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund 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 Commodities Strategy 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 Commodities Strategy Fund 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 Commodities Strategy i.e., Commodities Strategy and Jpmorgan Emerging go up and down completely randomly.
Pair Corralation between Commodities Strategy and Jpmorgan Emerging
Assuming the 90 days horizon Commodities Strategy is expected to generate 1.15 times less return on investment than Jpmorgan Emerging. In addition to that, Commodities Strategy is 3.03 times more volatile than Jpmorgan Emerging Markets. It trades about 0.04 of its total potential returns per unit of risk. Jpmorgan Emerging Markets is currently generating about 0.13 per unit of volatility. If you would invest 569.00 in Jpmorgan Emerging Markets on October 25, 2024 and sell it today you would earn a total of 58.00 from holding Jpmorgan Emerging Markets or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Jpmorgan Emerging Markets
Performance |
| Timeline |
| Commodities Strategy |
| Jpmorgan Emerging Markets |
Commodities Strategy and Jpmorgan Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Jpmorgan Emerging
The main advantage of trading using opposite Commodities Strategy and Jpmorgan Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy 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.| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate Fund |
| Jpmorgan Emerging vs. Wells Fargo Diversified | Jpmorgan Emerging vs. Delaware Limited Term Diversified | Jpmorgan Emerging vs. Lord Abbett Diversified | Jpmorgan Emerging vs. Tiaa Cref Small Cap Blend |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |