Correlation Between Artemisome and JPM Global

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

By analyzing existing cross correlation between Artemisome I and JPM Global Equity, you can compare the effects of market volatilities on Artemisome 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 Artemisome with a short position of JPM Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artemisome and JPM Global.

Diversification Opportunities for Artemisome and JPM Global

0.66

Correlation Coefficient

Artemisome  JPM Global

Poor diversification

The 3 months correlation between Artemisome and JPM is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Artemisome I and JPM Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM Global Equity and Artemisome 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 Artemisome I 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 Equity has no effect on the direction of Artemisome i.e., Artemisome and JPM Global go up and down completely randomly.

Pair Corralation between Artemisome and JPM Global

Assuming the 90 days trading horizon Artemisome I is expected to generate 0.84 times more return on investment than JPM Global. However, Artemisome I is 1.19 times less risky than JPM Global. It trades about 0.12 of its potential returns per unit of risk. JPM Global Equity is currently generating about 0.01 per unit of risk. If you would invest  28,611  in Artemisome I on December 29, 2024 and sell it today you would earn a total of  1,405  from holding Artemisome I or generate 4.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Artemisome I  vs.  JPM Global Equity

Artemisome I

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artemisome I are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent forward-looking signals, Artemisome is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

JPM Global Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPM Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, JPM Global is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Artemisome and JPM Global

The main advantage of trading using opposite Artemisome and JPM Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artemisome 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.

The idea behind Artemisome I and JPM Global Equity 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.