Correlation Between JPMorgan Equity and Aims Property

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

By analyzing existing cross correlation between JPMorgan Equity Premium and Aims Property Securities, you can compare the effects of market volatilities on JPMorgan Equity and Aims Property 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 Equity with a short position of Aims Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Equity and Aims Property.

Diversification Opportunities for JPMorgan Equity and Aims Property

0.21

Correlation Coefficient

JPMorgan Equity  Aims Property

Modest diversification

The 3 months correlation between JPMorgan and Aims is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Equity Premium and Aims Property Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aims Property Securities and JPMorgan Equity 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 Equity Premium are associated (or correlated) with Aims Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aims Property Securities has no effect on the direction of JPMorgan Equity i.e., JPMorgan Equity and Aims Property go up and down completely randomly.

Pair Corralation between JPMorgan Equity and Aims Property

Assuming the 90 days trading horizon JPMorgan Equity is expected to generate 1.05 times less return on investment than Aims Property. But when comparing it to its historical volatility, JPMorgan Equity Premium is 2.66 times less risky than Aims Property. It trades about 0.09 of its potential returns per unit of risk. Aims Property Securities is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  160.00  in Aims Property Securities on September 30, 2024 and sell it today you would earn a total of  9.00  from holding Aims Property Securities or generate 5.63% return on investment over 90 days.

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

JPMorgan Equity Premium  vs.  Aims Property Securities

JPMorgan Equity Premium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Equity Premium has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, JPMorgan Equity is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Aims Property Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aims Property Securities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aims Property is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JPMorgan Equity and Aims Property

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

The idea behind JPMorgan Equity Premium and Aims Property Securities 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.