Correlation Between JPMIF Bond and Groupama Entreprises

Can any of the company-specific risk be diversified away by investing in both JPMIF Bond and Groupama Entreprises 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 JPMIF Bond and Groupama Entreprises into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JPMIF Bond Fund and Groupama Entreprises N, you can compare the effects of market volatilities on JPMIF Bond and Groupama Entreprises 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 JPMIF Bond with a short position of Groupama Entreprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMIF Bond and Groupama Entreprises.

Diversification Opportunities for JPMIF Bond and Groupama Entreprises

0.13

Correlation Coefficient

JPMIF Bond  Groupama Entreprises

Average diversification

The 3 months correlation between JPMIF and Groupama is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding JPMIF Bond Fund and Groupama Entreprises N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupama Entreprises and JPMIF Bond 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 JPMIF Bond Fund are associated (or correlated) with Groupama Entreprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupama Entreprises has no effect on the direction of JPMIF Bond i.e., JPMIF Bond and Groupama Entreprises go up and down completely randomly.

Pair Corralation between JPMIF Bond and Groupama Entreprises

Assuming the 90 days trading horizon JPMIF Bond is expected to generate 1.45 times less return on investment than Groupama Entreprises. In addition to that, JPMIF Bond is 46.61 times more volatile than Groupama Entreprises N. It trades about 0.01 of its total potential returns per unit of risk. Groupama Entreprises N is currently generating about 0.98 per unit of volatility. If you would invest  58,878  in Groupama Entreprises N on December 10, 2024 and sell it today you would earn a total of  876.00  from holding Groupama Entreprises N or generate 1.49% return on investment over 90 days.

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

JPMIF Bond Fund  vs.  Groupama Entreprises N

JPMIF Bond Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMIF Bond Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, JPMIF Bond is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Groupama Entreprises

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Groupama Entreprises N are ranked lower than 70 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Groupama Entreprises is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JPMIF Bond and Groupama Entreprises

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

The idea behind JPMIF Bond Fund and Groupama Entreprises N 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 Transaction History module to view history of all your transactions and understand their impact on performance.