Correlation Between Groupama Entreprises and JPMIF Bond

Can any of the company-specific risk be diversified away by investing in both Groupama Entreprises and JPMIF Bond 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 Groupama Entreprises and JPMIF Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Groupama Entreprises N and JPMIF Bond Fund, you can compare the effects of market volatilities on Groupama Entreprises and JPMIF Bond 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 Groupama Entreprises with a short position of JPMIF Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupama Entreprises and JPMIF Bond.

Diversification Opportunities for Groupama Entreprises and JPMIF Bond

0.87

Correlation Coefficient

Groupama Entreprises  JPMIF Bond

Very poor diversification

The 3 months correlation between Groupama and JPMIF is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Groupama Entreprises N and JPMIF Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMIF Bond Fund and Groupama Entreprises 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 Groupama Entreprises N are associated (or correlated) with JPMIF Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMIF Bond Fund has no effect on the direction of Groupama Entreprises i.e., Groupama Entreprises and JPMIF Bond go up and down completely randomly.

Pair Corralation between Groupama Entreprises and JPMIF Bond

Assuming the 90 days trading horizon Groupama Entreprises N is expected to generate 0.03 times more return on investment than JPMIF Bond. However, Groupama Entreprises N is 37.43 times less risky than JPMIF Bond. It trades about 0.88 of its potential returns per unit of risk. JPMIF Bond Fund is currently generating about -0.12 per unit of risk. If you would invest  59,316  in Groupama Entreprises N on October 1, 2024 and sell it today you would earn a total of  104.00  from holding Groupama Entreprises N or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	94.44%
Values	Daily Returns

Groupama Entreprises N  vs.  JPMIF Bond Fund

Groupama Entreprises

Risk-Adjusted Performance

77 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Groupama Entreprises N are ranked lower than 77 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Groupama Entreprises is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

JPMIF Bond Fund

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMIF Bond Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, JPMIF Bond is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Groupama Entreprises and JPMIF Bond

The main advantage of trading using opposite Groupama Entreprises and JPMIF Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupama Entreprises position performs unexpectedly, JPMIF Bond 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 JPMIF Bond will offset losses from the drop in JPMIF Bond's long position.

The idea behind Groupama Entreprises N and JPMIF Bond Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.