Correlation Between First Eagle and Jpmorgan Income

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

By analyzing existing cross correlation between First Eagle Global and Jpmorgan Income Builder, you can compare the effects of market volatilities on First Eagle and Jpmorgan Income 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 First Eagle with a short position of Jpmorgan Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Jpmorgan Income.

Diversification Opportunities for First Eagle and Jpmorgan Income

0.27

Correlation Coefficient

First Eagle  Jpmorgan Income

Modest diversification

The 3 months correlation between First and Jpmorgan is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Global and Jpmorgan Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Income Builder and First Eagle 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 First Eagle Global are associated (or correlated) with Jpmorgan Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Income Builder has no effect on the direction of First Eagle i.e., First Eagle and Jpmorgan Income go up and down completely randomly.

Pair Corralation between First Eagle and Jpmorgan Income

Assuming the 90 days horizon First Eagle Global is expected to under-perform the Jpmorgan Income. In addition to that, First Eagle is 2.43 times more volatile than Jpmorgan Income Builder. It trades about -0.1 of its total potential returns per unit of risk. Jpmorgan Income Builder is currently generating about -0.02 per unit of volatility. If you would invest  1,004  in Jpmorgan Income Builder on September 15, 2024 and sell it today you would lose (4.00) from holding Jpmorgan Income Builder or give up 0.4% of portfolio value over 90 days.

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

First Eagle Global  vs.  Jpmorgan Income Builder

First Eagle Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jpmorgan Income Builder

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with First Eagle and Jpmorgan Income

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

The idea behind First Eagle Global and Jpmorgan Income Builder 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 Commodity Directory module to find actively traded commodities issued by global exchanges.