Correlation Between JPMorgan Emerging and JPMorgan Market

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

By analyzing existing cross correlation between JPMorgan Emerging Markets and JPMorgan Market Expansion, you can compare the effects of market volatilities on JPMorgan Emerging and JPMorgan Market 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 Emerging with a short position of JPMorgan Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Emerging and JPMorgan Market.

Diversification Opportunities for JPMorgan Emerging and JPMorgan Market

-0.38

Correlation Coefficient

JPMorgan Emerging  JPMorgan Market

Very good diversification

The 3 months correlation between JPMorgan and JPMorgan is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Emerging Markets and JPMorgan Market Expansion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Market Expansion and JPMorgan Emerging 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 Emerging Markets are associated (or correlated) with JPMorgan Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Market Expansion has no effect on the direction of JPMorgan Emerging i.e., JPMorgan Emerging and JPMorgan Market go up and down completely randomly.

Pair Corralation between JPMorgan Emerging and JPMorgan Market

Given the investment horizon of 90 days JPMorgan Emerging Markets is expected to generate 0.95 times more return on investment than JPMorgan Market. However, JPMorgan Emerging Markets is 1.05 times less risky than JPMorgan Market. It trades about 0.04 of its potential returns per unit of risk. JPMorgan Market Expansion is currently generating about -0.11 per unit of risk. If you would invest  3,753  in JPMorgan Emerging Markets on December 30, 2024 and sell it today you would earn a total of  91.00  from holding JPMorgan Emerging Markets or generate 2.42% return on investment over 90 days.

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

JPMorgan Emerging Markets  vs.  JPMorgan Market Expansion

JPMorgan Emerging Markets

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Emerging Markets are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, JPMorgan Emerging is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

JPMorgan Market Expansion

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan Market Expansion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with JPMorgan Emerging and JPMorgan Market

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

The idea behind JPMorgan Emerging Markets and JPMorgan Market Expansion 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.

Check out your portfolio center.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.