Correlation Between Jpmorgan Emerging and Baron Fintech

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

Diversification Opportunities for Jpmorgan Emerging and Baron Fintech

-0.02

Correlation Coefficient

Jpmorgan Emerging  Baron Fintech

Good diversification

The 3 months correlation between JPMORGAN and Baron is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Emerging Markets and Baron Fintech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Fintech 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 Baron Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Fintech has no effect on the direction of Jpmorgan Emerging i.e., Jpmorgan Emerging and Baron Fintech go up and down completely randomly.

Pair Corralation between Jpmorgan Emerging and Baron Fintech

Assuming the 90 days horizon Jpmorgan Emerging is expected to generate 31.23 times less return on investment than Baron Fintech. In addition to that, Jpmorgan Emerging is 1.06 times more volatile than Baron Fintech. It trades about 0.01 of its total potential returns per unit of risk. Baron Fintech is currently generating about 0.28 per unit of volatility. If you would invest  1,591  in Baron Fintech on September 3, 2024 and sell it today you would earn a total of  253.00  from holding Baron Fintech or generate 15.9% 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.  Baron Fintech

Jpmorgan Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking indicators, Jpmorgan Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Baron Fintech

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Fintech are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Baron Fintech showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jpmorgan Emerging and Baron Fintech

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

The idea behind Jpmorgan Emerging Markets and Baron Fintech 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.