Correlation Between Jpmorgan and Firsthand Technology

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

By analyzing existing cross correlation between Jpmorgan Equity Fund and Firsthand Technology Opportunities, you can compare the effects of market volatilities on Jpmorgan and Firsthand Technology 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 with a short position of Firsthand Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan and Firsthand Technology.

Diversification Opportunities for Jpmorgan and Firsthand Technology

0.34

Correlation Coefficient

Jpmorgan  Firsthand Technology

Weak diversification

The 3 months correlation between Jpmorgan and Firsthand is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Fund and Firsthand Technology Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Technology and Jpmorgan 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 Equity Fund are associated (or correlated) with Firsthand Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Technology has no effect on the direction of Jpmorgan i.e., Jpmorgan and Firsthand Technology go up and down completely randomly.

Pair Corralation between Jpmorgan and Firsthand Technology

Assuming the 90 days horizon Jpmorgan is expected to generate 1.44 times less return on investment than Firsthand Technology. But when comparing it to its historical volatility, Jpmorgan Equity Fund is 1.81 times less risky than Firsthand Technology. It trades about 0.09 of its potential returns per unit of risk. Firsthand Technology Opportunities is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  399.00  in Firsthand Technology Opportunities on October 26, 2024 and sell it today you would earn a total of  8.00  from holding Firsthand Technology Opportunities or generate 2.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Jpmorgan Equity Fund  vs.  Firsthand Technology Opportuni

Jpmorgan Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Equity Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Firsthand Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Firsthand Technology Opportunities are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Firsthand Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jpmorgan and Firsthand Technology

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

The idea behind Jpmorgan Equity Fund and Firsthand Technology Opportunities 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 Global Correlations module to find global opportunities by holding instruments from different markets.