Correlation Between BlackRock Latin and JPM Global

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

By analyzing existing cross correlation between BlackRock Latin American and JPM Global Research, you can compare the effects of market volatilities on BlackRock Latin and JPM Global 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 BlackRock Latin with a short position of JPM Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Latin and JPM Global.

Diversification Opportunities for BlackRock Latin and JPM Global

-0.76

Correlation Coefficient

BlackRock Latin  JPM Global

Pay attention - limited upside

The 3 months correlation between BlackRock and JPM is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Latin American and JPM Global Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM Global Research and BlackRock Latin 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 BlackRock Latin American are associated (or correlated) with JPM Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM Global Research has no effect on the direction of BlackRock Latin i.e., BlackRock Latin and JPM Global go up and down completely randomly.

Pair Corralation between BlackRock Latin and JPM Global

Assuming the 90 days trading horizon BlackRock Latin American is expected to under-perform the JPM Global. In addition to that, BlackRock Latin is 2.27 times more volatile than JPM Global Research. It trades about -0.17 of its total potential returns per unit of risk. JPM Global Research is currently generating about 0.1 per unit of volatility. If you would invest  247,325  in JPM Global Research on October 9, 2024 and sell it today you would earn a total of  5,500  from holding JPM Global Research or generate 2.22% return on investment over 90 days.

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

BlackRock Latin American  vs.  JPM Global Research

BlackRock Latin American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Latin American has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

JPM Global Research

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPM Global Research are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JPM Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BlackRock Latin and JPM Global

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

The idea behind BlackRock Latin American and JPM Global Research 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 Stocks Directory module to find actively traded stocks across global markets.