Correlation Between JPMorgan BetaBuilders and Anfield Dynamic

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

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

Diversification Opportunities for JPMorgan BetaBuilders and Anfield Dynamic

0.47

Correlation Coefficient

JPMorgan BetaBuilders  Anfield Dynamic

Very weak diversification

The 3 months correlation between JPMorgan and Anfield is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan BetaBuilders Canada and Anfield Dynamic Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Dynamic Fixed and JPMorgan BetaBuilders 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 JPMorgan BetaBuilders Canada are associated (or correlated) with Anfield Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Dynamic Fixed has no effect on the direction of JPMorgan BetaBuilders i.e., JPMorgan BetaBuilders and Anfield Dynamic go up and down completely randomly.

Pair Corralation between JPMorgan BetaBuilders and Anfield Dynamic

Given the investment horizon of 90 days JPMorgan BetaBuilders Canada is expected to under-perform the Anfield Dynamic. In addition to that, JPMorgan BetaBuilders is 1.48 times more volatile than Anfield Dynamic Fixed. It trades about -0.05 of its total potential returns per unit of risk. Anfield Dynamic Fixed is currently generating about -0.06 per unit of volatility. If you would invest  853.00  in Anfield Dynamic Fixed on October 20, 2024 and sell it today you would lose (16.00) from holding Anfield Dynamic Fixed or give up 1.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

JPMorgan BetaBuilders Canada  vs.  Anfield Dynamic Fixed

JPMorgan BetaBuilders

Risk-Adjusted Performance

0 of 100

Very Weak

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

Anfield Dynamic Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anfield Dynamic Fixed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Anfield Dynamic is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with JPMorgan BetaBuilders and Anfield Dynamic

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

The idea behind JPMorgan BetaBuilders Canada and Anfield Dynamic Fixed 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.