Correlation Between Scottish Mortgage and JPM Global
Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage and JPM Global 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 Scottish Mortgage and JPM Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottish Mortgage Investment and JPM Global Research, you can compare the effects of market volatilities on Scottish Mortgage and JPM Global 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 Scottish Mortgage with a short position of JPM Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and JPM Global.
Diversification Opportunities for Scottish Mortgage and JPM Global
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scottish and JPM is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage Investment and JPM Global Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM Global Research and Scottish Mortgage 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 Scottish Mortgage Investment are associated (or correlated) with JPM Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM Global Research has no effect on the direction of Scottish Mortgage i.e., Scottish Mortgage and JPM Global go up and down completely randomly.
Pair Corralation between Scottish Mortgage and JPM Global
Assuming the 90 days trading horizon Scottish Mortgage Investment is expected to generate 2.25 times more return on investment than JPM Global. However, Scottish Mortgage is 2.25 times more volatile than JPM Global Research. It trades about 0.06 of its potential returns per unit of risk. JPM Global Research is currently generating about 0.11 per unit of risk. If you would invest 69,396 in Scottish Mortgage Investment on November 28, 2024 and sell it today you would earn a total of 34,554 from holding Scottish Mortgage Investment or generate 49.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.87% |
| Values | Daily Returns |
Scottish Mortgage Investment vs. JPM Global Research
Performance |
| Timeline |
| Scottish Mortgage |
| JPM Global Research |
Scottish Mortgage and JPM Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottish Mortgage and JPM Global
The main advantage of trading using opposite Scottish Mortgage and JPM Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish Mortgage position performs unexpectedly, JPM Global 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 JPM Global will offset losses from the drop in JPM Global's long position.| Scottish Mortgage vs. iShares MSCI Japan | Scottish Mortgage vs. Amundi EUR High | Scottish Mortgage vs. iShares JP Morgan | Scottish Mortgage vs. Xtrackers MSCI |
| JPM Global vs. JPM BetaBuilders China | JPM Global vs. JPM AC Asia | JPM Global vs. JPM BetaBuilders Treasury | JPM Global vs. JPM Research Enhanced |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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