Correlation Between St Galler and JPMorgan Japanese

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

By analyzing existing cross correlation between St Galler Kantonalbank and JPMorgan Japanese Investment, you can compare the effects of market volatilities on St Galler and JPMorgan Japanese 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 St Galler with a short position of JPMorgan Japanese. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and JPMorgan Japanese.

Diversification Opportunities for St Galler and JPMorgan Japanese

0.69

Correlation Coefficient

St Galler  JPMorgan Japanese

Poor diversification

The 3 months correlation between 0QQZ and JPMorgan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and JPMorgan Japanese Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Japanese and St Galler 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 St Galler Kantonalbank are associated (or correlated) with JPMorgan Japanese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Japanese has no effect on the direction of St Galler i.e., St Galler and JPMorgan Japanese go up and down completely randomly.

Pair Corralation between St Galler and JPMorgan Japanese

Assuming the 90 days trading horizon St Galler Kantonalbank is expected to generate 1.01 times more return on investment than JPMorgan Japanese. However, St Galler is 1.01 times more volatile than JPMorgan Japanese Investment. It trades about 0.31 of its potential returns per unit of risk. JPMorgan Japanese Investment is currently generating about 0.31 per unit of risk. If you would invest  43,700  in St Galler Kantonalbank on October 26, 2024 and sell it today you would earn a total of  1,725  from holding St Galler Kantonalbank or generate 3.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

St Galler Kantonalbank  vs.  JPMorgan Japanese Investment

St Galler Kantonalbank

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in St Galler Kantonalbank are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, St Galler may actually be approaching a critical reversion point that can send shares even higher in February 2025.

JPMorgan Japanese

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Japanese Investment are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, JPMorgan Japanese may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with St Galler and JPMorgan Japanese

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

The idea behind St Galler Kantonalbank and JPMorgan Japanese Investment 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.