Correlation Between Us Government and Jpmorgan Emerging
Can any of the company-specific risk be diversified away by investing in both Us Government 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 Us Government and Jpmorgan Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Jpmorgan Emerging Markets, you can compare the effects of market volatilities on Us Government 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 Us Government with a short position of Jpmorgan Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Jpmorgan Emerging.
Diversification Opportunities for Us Government and Jpmorgan Emerging
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USGFX and Jpmorgan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities 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 Us Government 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 Us Government Securities 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 Us Government i.e., Us Government and Jpmorgan Emerging go up and down completely randomly.
Pair Corralation between Us Government and Jpmorgan Emerging
Assuming the 90 days horizon Us Government is expected to generate 3.08 times less return on investment than Jpmorgan Emerging. In addition to that, Us Government is 1.17 times more volatile than Jpmorgan Emerging Markets. It trades about 0.08 of its total potential returns per unit of risk. Jpmorgan Emerging Markets is currently generating about 0.3 per unit of volatility. If you would invest 619.00 in Jpmorgan Emerging Markets on November 7, 2024 and sell it today you would earn a total of 11.00 from holding Jpmorgan Emerging Markets or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Us Government Securities vs. Jpmorgan Emerging Markets
Performance |
| Timeline |
| Us Government Securities |
| Jpmorgan Emerging Markets |
Us Government and Jpmorgan Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Jpmorgan Emerging
The main advantage of trading using opposite Us Government and Jpmorgan Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government 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.| Us Government vs. Tfa Alphagen Growth | Us Government vs. T Rowe Price | Us Government vs. Vanguard Growth And | Us Government vs. Qs Defensive Growth |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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