Correlation Between JPMF Global and FF Global

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

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

Diversification Opportunities for JPMF Global and FF Global

0.39

Correlation Coefficient

JPMF Global  FF Global

Weak diversification

The 3 months correlation between JPMF and FJ2P is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding JPMF Global Natural and FF Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FF Global and JPMF Global 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 JPMF Global Natural are associated (or correlated) with FF Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FF Global has no effect on the direction of JPMF Global i.e., JPMF Global and FF Global go up and down completely randomly.

Pair Corralation between JPMF Global and FF Global

Assuming the 90 days trading horizon JPMF Global Natural is expected to under-perform the FF Global. In addition to that, JPMF Global is 1.21 times more volatile than FF Global. It trades about -0.03 of its total potential returns per unit of risk. FF Global is currently generating about 0.17 per unit of volatility. If you would invest  6,635  in FF Global on September 22, 2024 and sell it today you would earn a total of  763.00  from holding FF Global or generate 11.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

JPMF Global Natural  vs.  FF Global

JPMF Global Natural

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMF Global Natural has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, JPMF Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

FF Global

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FF Global are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical and fundamental indicators, FF Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JPMF Global and FF Global

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

The idea behind JPMF Global Natural and FF Global 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.