Correlation Between CSHG Real and JPP CAPITAL

Can any of the company-specific risk be diversified away by investing in both CSHG Real and JPP CAPITAL 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 CSHG Real and JPP CAPITAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CSHG Real Estate and JPP CAPITAL FDO, you can compare the effects of market volatilities on CSHG Real and JPP CAPITAL 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 CSHG Real with a short position of JPP CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSHG Real and JPP CAPITAL.

Diversification Opportunities for CSHG Real and JPP CAPITAL

-0.28

Correlation Coefficient

CSHG Real  JPP CAPITAL

Very good diversification

The 3 months correlation between CSHG and JPP is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CSHG Real Estate and JPP CAPITAL FDO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPP CAPITAL FDO and CSHG Real 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 CSHG Real Estate are associated (or correlated) with JPP CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPP CAPITAL FDO has no effect on the direction of CSHG Real i.e., CSHG Real and JPP CAPITAL go up and down completely randomly.

Pair Corralation between CSHG Real and JPP CAPITAL

Assuming the 90 days trading horizon CSHG Real Estate is expected to under-perform the JPP CAPITAL. But the fund apears to be less risky and, when comparing its historical volatility, CSHG Real Estate is 1.16 times less risky than JPP CAPITAL. The fund trades about -0.26 of its potential returns per unit of risk. The JPP CAPITAL FDO is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  20,000  in JPP CAPITAL FDO on October 27, 2024 and sell it today you would earn a total of  0.00  from holding JPP CAPITAL FDO or generate 0.0% return on investment over 90 days.

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

CSHG Real Estate  vs.  JPP CAPITAL FDO

CSHG Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSHG Real Estate has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

JPP CAPITAL FDO

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPP CAPITAL FDO are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, JPP CAPITAL sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSHG Real and JPP CAPITAL

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

The idea behind CSHG Real Estate and JPP CAPITAL FDO 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.