Correlation Between JPM Emerging and Groupama Entreprises

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

By analyzing existing cross correlation between JPM Emerging Markets and Groupama Entreprises N, you can compare the effects of market volatilities on JPM Emerging and Groupama Entreprises 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 Emerging with a short position of Groupama Entreprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPM Emerging and Groupama Entreprises.

Diversification Opportunities for JPM Emerging and Groupama Entreprises

0.03

Correlation Coefficient

JPM Emerging  Groupama Entreprises

Significant diversification

The 3 months correlation between JPM and Groupama is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding JPM Emerging Markets and Groupama Entreprises N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupama Entreprises and JPM 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 JPM Emerging Markets are associated (or correlated) with Groupama Entreprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupama Entreprises has no effect on the direction of JPM Emerging i.e., JPM Emerging and Groupama Entreprises go up and down completely randomly.

Pair Corralation between JPM Emerging and Groupama Entreprises

Assuming the 90 days trading horizon JPM Emerging is expected to generate 3.14 times less return on investment than Groupama Entreprises. In addition to that, JPM Emerging is 83.73 times more volatile than Groupama Entreprises N. It trades about 0.0 of its total potential returns per unit of risk. Groupama Entreprises N is currently generating about 0.93 per unit of volatility. If you would invest  59,420  in Groupama Entreprises N on December 25, 2024 and sell it today you would earn a total of  388.00  from holding Groupama Entreprises N or generate 0.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

JPM Emerging Markets  vs.  Groupama Entreprises N

JPM Emerging Markets

Risk-Adjusted Performance

Very Weak

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

Groupama Entreprises

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Groupama Entreprises N are ranked lower than 73 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Groupama Entreprises is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JPM Emerging and Groupama Entreprises

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

The idea behind JPM Emerging Markets and Groupama Entreprises N 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.