Correlation Between SISF BRIC and JPM America
Can any of the company-specific risk be diversified away by investing in both SISF BRIC and JPM America 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 SISF BRIC and JPM America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SISF BRIC AC and JPM America Equity, you can compare the effects of market volatilities on SISF BRIC and JPM America 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 SISF BRIC with a short position of JPM America. Check out your portfolio center. Please also check ongoing floating volatility patterns of SISF BRIC and JPM America.
Diversification Opportunities for SISF BRIC and JPM America
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SISF and JPM is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SISF BRIC AC and JPM America Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM America Equity and SISF BRIC 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 SISF BRIC AC are associated (or correlated) with JPM America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM America Equity has no effect on the direction of SISF BRIC i.e., SISF BRIC and JPM America go up and down completely randomly.
Pair Corralation between SISF BRIC and JPM America
Assuming the 90 days trading horizon SISF BRIC is expected to generate 1.82 times less return on investment than JPM America. In addition to that, SISF BRIC is 1.15 times more volatile than JPM America Equity. It trades about 0.06 of its total potential returns per unit of risk. JPM America Equity is currently generating about 0.13 per unit of volatility. If you would invest 36,978 in JPM America Equity on August 29, 2024 and sell it today you would earn a total of 7,363 from holding JPM America Equity or generate 19.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
SISF BRIC AC vs. JPM America Equity
Performance |
| Timeline |
| SISF BRIC AC |
| JPM America Equity |
SISF BRIC and JPM America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SISF BRIC and JPM America
The main advantage of trading using opposite SISF BRIC and JPM America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SISF BRIC position performs unexpectedly, JPM America 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 America will offset losses from the drop in JPM America's long position.| SISF BRIC vs. Renaissance Europe C | SISF BRIC vs. Superior Plus Corp | SISF BRIC vs. Origin Agritech | SISF BRIC vs. Identiv |
| JPM America vs. Renaissance Europe C | JPM America vs. Superior Plus Corp | JPM America vs. Origin Agritech | JPM America vs. Identiv |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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