Correlation Between Caixabank Seleccin and JPMIF Bond

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

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

Diversification Opportunities for Caixabank Seleccin and JPMIF Bond

0.92

Correlation Coefficient

Caixabank Seleccin  JPMIF Bond

Almost no diversification

The 3 months correlation between Caixabank and JPMIF is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank Seleccin Tendencias 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 Caixabank Seleccin 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 Caixabank Seleccin Tendencias 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 Caixabank Seleccin i.e., Caixabank Seleccin and JPMIF Bond go up and down completely randomly.

Pair Corralation between Caixabank Seleccin and JPMIF Bond

Assuming the 90 days trading horizon Caixabank Seleccin Tendencias is expected to under-perform the JPMIF Bond. In addition to that, Caixabank Seleccin is 1.24 times more volatile than JPMIF Bond Fund. It trades about -0.45 of its total potential returns per unit of risk. JPMIF Bond Fund is currently generating about -0.12 per unit of volatility. If you would invest  23,053  in JPMIF Bond Fund on October 1, 2024 and sell it today you would lose (226.00) from holding JPMIF Bond Fund or give up 0.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	88.89%
Values	Daily Returns

Caixabank Seleccin Tendencias  vs.  JPMIF Bond Fund

Caixabank Seleccin

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Caixabank Seleccin Tendencias are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Caixabank Seleccin is not utilizing all of its potentials. The current 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 Caixabank Seleccin and JPMIF Bond

The main advantage of trading using opposite Caixabank Seleccin and JPMIF Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixabank Seleccin 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 Caixabank Seleccin Tendencias 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.