Correlation Between Firsthand Alternative and Jpmorgan Large

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

By analyzing existing cross correlation between Firsthand Alternative Energy and Jpmorgan Large Cap, you can compare the effects of market volatilities on Firsthand Alternative and Jpmorgan Large 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 Firsthand Alternative with a short position of Jpmorgan Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Jpmorgan Large.

Diversification Opportunities for Firsthand Alternative and Jpmorgan Large

0.51

Correlation Coefficient

Firsthand Alternative  Jpmorgan Large

Very weak diversification

The 3 months correlation between Firsthand and JPMORGAN is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Jpmorgan Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Large Cap and Firsthand Alternative 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 Firsthand Alternative Energy are associated (or correlated) with Jpmorgan Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Large Cap has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Jpmorgan Large go up and down completely randomly.

Pair Corralation between Firsthand Alternative and Jpmorgan Large

Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Jpmorgan Large. In addition to that, Firsthand Alternative is 1.46 times more volatile than Jpmorgan Large Cap. It trades about -0.19 of its total potential returns per unit of risk. Jpmorgan Large Cap is currently generating about -0.06 per unit of volatility. If you would invest  5,176  in Jpmorgan Large Cap on December 2, 2024 and sell it today you would lose (229.00) from holding Jpmorgan Large Cap or give up 4.42% of portfolio value over 90 days.

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

Firsthand Alternative Energy  vs.  Jpmorgan Large Cap

Firsthand Alternative

Risk-Adjusted Performance

Very Weak

Over the last 90 days Firsthand Alternative Energy has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Jpmorgan Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jpmorgan Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Jpmorgan Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Firsthand Alternative and Jpmorgan Large

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

The idea behind Firsthand Alternative Energy and Jpmorgan Large Cap 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.