Correlation Between Anfield Equity and JPMorgan

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

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

Diversification Opportunities for Anfield Equity and JPMorgan

0.74

Correlation Coefficient

Anfield Equity  JPMorgan

Poor diversification

The 3 months correlation between Anfield and JPMorgan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Equity Sector and JPMorgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan and Anfield Equity 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 Anfield Equity Sector are associated (or correlated) with JPMorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan has no effect on the direction of Anfield Equity i.e., Anfield Equity and JPMorgan go up and down completely randomly.

Pair Corralation between Anfield Equity and JPMorgan

Given the investment horizon of 90 days Anfield Equity Sector is expected to generate 6.12 times more return on investment than JPMorgan. However, Anfield Equity is 6.12 times more volatile than JPMorgan. It trades about 0.19 of its potential returns per unit of risk. JPMorgan is currently generating about -0.03 per unit of risk. If you would invest  1,623  in Anfield Equity Sector on September 4, 2024 and sell it today you would earn a total of  168.00  from holding Anfield Equity Sector or generate 10.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	54.69%
Values	Daily Returns

Anfield Equity Sector  vs.  JPMorgan

Anfield Equity Sector

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Equity Sector are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Anfield Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

JPMorgan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, JPMorgan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Anfield Equity and JPMorgan

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

The idea behind Anfield Equity Sector and JPMorgan 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.