Correlation Between Apple and JPM P

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

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

Diversification Opportunities for Apple and JPM P

-0.73

Correlation Coefficient

Apple  JPM P

Pay attention - limited upside

The 3 months correlation between Apple and JPM is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and JPM P J in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM P J and Apple 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 Apple Inc are associated (or correlated) with JPM P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM P J has no effect on the direction of Apple i.e., Apple and JPM P go up and down completely randomly.

Pair Corralation between Apple and JPM P

Given the investment horizon of 90 days Apple Inc is expected to generate 1.58 times more return on investment than JPM P. However, Apple is 1.58 times more volatile than JPM P J. It trades about 0.11 of its potential returns per unit of risk. JPM P J is currently generating about 0.02 per unit of risk. If you would invest  12,377  in Apple Inc on September 22, 2024 and sell it today you would earn a total of  13,072  from holding Apple Inc or generate 105.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Apple Inc  vs.  JPM P J

Apple Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

JPM P J

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPM P J has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Preferred Stock's forward-looking indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Pair Trading with Apple and JPM P

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

The idea behind Apple Inc and JPM P J 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 Stocks Directory module to find actively traded stocks across global markets.