Correlation Between JPM America and FF Global

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

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

Diversification Opportunities for JPM America and FF Global

0.0

Correlation Coefficient

JPM America  FF Global

Pay attention - limited upside

The 3 months correlation between JPM and FJ2P is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JPM America Equity and FF Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FF Global and JPM America 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 JPM America Equity 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 JPM America i.e., JPM America and FF Global go up and down completely randomly.

Pair Corralation between JPM America and FF Global

If you would invest (100.00) in FF Global on December 20, 2024 and sell it today you would earn a total of  100.00  from holding FF Global or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

JPM America Equity  vs.  FF Global

JPM America Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPM America Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unsteady performance, the Fund's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

FF Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days FF Global has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable basic indicators, FF Global is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with JPM America and FF Global

The main advantage of trading using opposite JPM America and FF Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPM America 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 JPM America Equity 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.