Correlation Between JPMIF Bond and Caixabank Seleccin

Can any of the company-specific risk be diversified away by investing in both JPMIF Bond and Caixabank Seleccin 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 Caixabank Seleccin 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 Caixabank Seleccin Tendencias, you can compare the effects of market volatilities on JPMIF Bond and Caixabank Seleccin 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 Caixabank Seleccin. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMIF Bond and Caixabank Seleccin.

Diversification Opportunities for JPMIF Bond and Caixabank Seleccin

0.9

Correlation Coefficient

JPMIF Bond  Caixabank Seleccin

Almost no diversification

The 3 months correlation between JPMIF and Caixabank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding JPMIF Bond Fund and Caixabank Seleccin Tendencias in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixabank Seleccin 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 Caixabank Seleccin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caixabank Seleccin has no effect on the direction of JPMIF Bond i.e., JPMIF Bond and Caixabank Seleccin go up and down completely randomly.

Pair Corralation between JPMIF Bond and Caixabank Seleccin

Assuming the 90 days trading horizon JPMIF Bond is expected to generate 1.66 times less return on investment than Caixabank Seleccin. But when comparing it to its historical volatility, JPMIF Bond Fund is 1.99 times less risky than Caixabank Seleccin. It trades about 0.08 of its potential returns per unit of risk. Caixabank Seleccin Tendencias is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,577  in Caixabank Seleccin Tendencias on September 22, 2024 and sell it today you would earn a total of  114.00  from holding Caixabank Seleccin Tendencias or generate 7.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.22%
Values	Daily Returns

JPMIF Bond Fund  vs.  Caixabank Seleccin Tendencias

JPMIF Bond Fund

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMIF Bond Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. 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.

Caixabank Seleccin

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Caixabank Seleccin Tendencias are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Caixabank Seleccin may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JPMIF Bond and Caixabank Seleccin

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

The idea behind JPMIF Bond Fund and Caixabank Seleccin Tendencias 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.