Correlation Between Cebu Air and JPM P

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

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

Diversification Opportunities for Cebu Air and JPM P

0.0

Correlation Coefficient

Cebu Air  JPM P

Pay attention - limited upside

The 3 months correlation between Cebu and JPM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air ADR 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 Cebu Air 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 Cebu Air ADR 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 Cebu Air i.e., Cebu Air and JPM P go up and down completely randomly.

Pair Corralation between Cebu Air and JPM P

If you would invest  2,102  in JPM P J on December 20, 2024 and sell it today you would earn a total of  3.00  from holding JPM P J or generate 0.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Cebu Air ADR  vs.  JPM P J

Cebu Air ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cebu Air ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Cebu Air is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

JPM P J

Risk-Adjusted Performance

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 relatively steady forward-looking indicators, JPM P is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Cebu Air and JPM P

The main advantage of trading using opposite Cebu Air and JPM P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air 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 Cebu Air ADR 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.