Correlation Between Jpmorgan Emerging and Fidelity Series

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

Diversification Opportunities for Jpmorgan Emerging and Fidelity Series

0.61

Correlation Coefficient

Jpmorgan Emerging  Fidelity Series

Poor diversification

The 3 months correlation between Jpmorgan and Fidelity is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Emerging Markets and Fidelity Series Long Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Long 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 Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Long has no effect on the direction of Jpmorgan Emerging i.e., Jpmorgan Emerging and Fidelity Series go up and down completely randomly.

Pair Corralation between Jpmorgan Emerging and Fidelity Series

Assuming the 90 days horizon Jpmorgan Emerging Markets is expected to generate 1.62 times more return on investment than Fidelity Series. However, Jpmorgan Emerging is 1.62 times more volatile than Fidelity Series Long Term. It trades about 0.09 of its potential returns per unit of risk. Fidelity Series Long Term is currently generating about 0.05 per unit of risk. If you would invest  2,906  in Jpmorgan Emerging Markets on December 28, 2024 and sell it today you would earn a total of  174.00  from holding Jpmorgan Emerging Markets or generate 5.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Jpmorgan Emerging Markets  vs.  Fidelity Series Long Term

Jpmorgan Emerging Markets

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Emerging Markets are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking indicators, Jpmorgan Emerging may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Fidelity Series Long

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Series Long Term are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jpmorgan Emerging and Fidelity Series

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

The idea behind Jpmorgan Emerging Markets and Fidelity Series Long Term 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 Transaction History module to view history of all your transactions and understand their impact on performance.