Correlation Between Jpmorgan Small and Siit Global

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

By analyzing existing cross correlation between Jpmorgan Small Cap and Siit Global Managed, you can compare the effects of market volatilities on Jpmorgan Small and Siit Global 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 Small with a short position of Siit Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Small and Siit Global.

Diversification Opportunities for Jpmorgan Small and Siit Global

0.84

Correlation Coefficient

Jpmorgan Small  Siit Global

Very poor diversification

The 3 months correlation between Jpmorgan and Siit is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Small Cap and Siit Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Global Managed and Jpmorgan Small 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 Small Cap are associated (or correlated) with Siit Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Global Managed has no effect on the direction of Jpmorgan Small i.e., Jpmorgan Small and Siit Global go up and down completely randomly.

Pair Corralation between Jpmorgan Small and Siit Global

Assuming the 90 days horizon Jpmorgan Small Cap is expected to generate 2.9 times more return on investment than Siit Global. However, Jpmorgan Small is 2.9 times more volatile than Siit Global Managed. It trades about 0.07 of its potential returns per unit of risk. Siit Global Managed is currently generating about 0.17 per unit of risk. If you would invest  1,914  in Jpmorgan Small Cap on September 12, 2024 and sell it today you would earn a total of  427.00  from holding Jpmorgan Small Cap or generate 22.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.6%
Values	Daily Returns

Jpmorgan Small Cap  vs.  Siit Global Managed

Jpmorgan Small Cap

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Small Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jpmorgan Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Siit Global Managed

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Global Managed are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Siit Global 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 Small and Siit Global

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

The idea behind Jpmorgan Small Cap and Siit Global Managed 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.