Correlation Between Schroder Asian and JPM Global

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

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

Diversification Opportunities for Schroder Asian and JPM Global

0.79

Correlation Coefficient

Schroder Asian  JPM Global

Poor diversification

The 3 months correlation between Schroder and JPM is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Schroder Asian Alpha 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 Schroder Asian 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 Schroder Asian Alpha 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 Schroder Asian i.e., Schroder Asian and JPM Global go up and down completely randomly.

Pair Corralation between Schroder Asian and JPM Global

Assuming the 90 days trading horizon Schroder Asian is expected to generate 1.74 times less return on investment than JPM Global. In addition to that, Schroder Asian is 1.18 times more volatile than JPM Global Equity. It trades about 0.0 of its total potential returns per unit of risk. JPM Global Equity is currently generating about 0.01 per unit of volatility. If you would invest  397.00  in JPM Global Equity on December 28, 2024 and sell it today you would earn a total of  1.00  from holding JPM Global Equity or generate 0.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Schroder Asian Alpha  vs.  JPM Global Equity

Schroder Asian Alpha

Risk-Adjusted Performance

Very Weak

Over the last 90 days Schroder Asian Alpha has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, Schroder Asian is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

JPM Global Equity

Risk-Adjusted Performance

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 Schroder Asian and JPM Global

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

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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 Stocks Directory module to find actively traded stocks across global markets.