Correlation Between JPM Research and JPM AC

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

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

Diversification Opportunities for JPM Research and JPM AC

0.14

Correlation Coefficient

JPM Research  JPM AC

Average diversification

The 3 months correlation between JPM and JPM is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding JPM Research Enhanced and JPM AC Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM AC Asia and JPM Research 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 Research Enhanced are associated (or correlated) with JPM AC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM AC Asia has no effect on the direction of JPM Research i.e., JPM Research and JPM AC go up and down completely randomly.

Pair Corralation between JPM Research and JPM AC

Assuming the 90 days trading horizon JPM Research Enhanced is expected to generate 0.47 times more return on investment than JPM AC. However, JPM Research Enhanced is 2.13 times less risky than JPM AC. It trades about 0.15 of its potential returns per unit of risk. JPM AC Asia is currently generating about 0.01 per unit of risk. If you would invest  191,830  in JPM Research Enhanced on October 23, 2024 and sell it today you would earn a total of  87,945  from holding JPM Research Enhanced or generate 45.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	72.49%
Values	Daily Returns

JPM Research Enhanced  vs.  JPM AC Asia

JPM Research Enhanced

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPM Research Enhanced are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JPM Research may actually be approaching a critical reversion point that can send shares even higher in February 2025.

JPM AC Asia

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JPM AC Asia are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JPM AC is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JPM Research and JPM AC

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

The idea behind JPM Research Enhanced and JPM AC Asia 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.