Correlation Between JPMorgan Active and Sprott Physical

Can any of the company-specific risk be diversified away by investing in both JPMorgan Active and Sprott Physical 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 JPMorgan Active and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JPMorgan Active Value and Sprott Physical Gold, you can compare the effects of market volatilities on JPMorgan Active and Sprott Physical 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 JPMorgan Active with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Active and Sprott Physical.

Diversification Opportunities for JPMorgan Active and Sprott Physical

-0.24

Correlation Coefficient

JPMorgan Active  Sprott Physical

Very good diversification

The 3 months correlation between JPMorgan and Sprott is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Active Value and Sprott Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Gold and JPMorgan Active 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 JPMorgan Active Value are associated (or correlated) with Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Gold has no effect on the direction of JPMorgan Active i.e., JPMorgan Active and Sprott Physical go up and down completely randomly.

Pair Corralation between JPMorgan Active and Sprott Physical

Given the investment horizon of 90 days JPMorgan Active Value is expected to under-perform the Sprott Physical. But the etf apears to be less risky and, when comparing its historical volatility, JPMorgan Active Value is 1.74 times less risky than Sprott Physical. The etf trades about -0.4 of its potential returns per unit of risk. The Sprott Physical Gold is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  2,508  in Sprott Physical Gold on September 23, 2024 and sell it today you would lose (109.00) from holding Sprott Physical Gold or give up 4.35% of portfolio value over 90 days.

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

JPMorgan Active Value  vs.  Sprott Physical Gold

JPMorgan Active Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Active Value has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, JPMorgan Active is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Sprott Physical Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sprott Physical Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Sprott Physical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JPMorgan Active and Sprott Physical

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

The idea behind JPMorgan Active Value and Sprott Physical Gold 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.