Correlation Between Small Cap and Jpmorgan Emerging
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Jpmorgan Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Stock and Jpmorgan Emerging Markets, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Jpmorgan Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Jpmorgan Emerging.
Diversification Opportunities for Small Cap and Jpmorgan Emerging
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Small and Jpmorgan is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock 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 Small Cap 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 Small Cap Stock 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 Small Cap i.e., Small Cap and Jpmorgan Emerging go up and down completely randomly.
Pair Corralation between Small Cap and Jpmorgan Emerging
Assuming the 90 days horizon Small Cap Stock is expected to generate 1.41 times more return on investment than Jpmorgan Emerging. However, Small Cap is 1.41 times more volatile than Jpmorgan Emerging Markets. It trades about 0.07 of its potential returns per unit of risk. Jpmorgan Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest 1,191 in Small Cap Stock on September 14, 2024 and sell it today you would earn a total of 295.00 from holding Small Cap Stock or generate 24.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Stock vs. Jpmorgan Emerging Markets
Performance |
| Timeline |
| Small Cap Stock |
| Jpmorgan Emerging Markets |
Small Cap and Jpmorgan Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Jpmorgan Emerging
The main advantage of trading using opposite Small Cap and Jpmorgan Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. Guggenheim Managed Futures | Small Cap vs. Simt Multi Asset Inflation | Small Cap vs. Goldman Sachs Inflation | Small Cap vs. Loomis Sayles Inflation |
| Jpmorgan Emerging vs. Issachar Fund Class | Jpmorgan Emerging vs. Small Cap Stock | Jpmorgan Emerging vs. Qs Growth Fund | Jpmorgan Emerging vs. L Abbett Fundamental |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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