Correlation Between Jpmorgan Equity and Aquagold International

Can any of the company-specific risk be diversified away by investing in both Jpmorgan Equity and Aquagold International 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 Equity and Aquagold International 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 Aquagold International, you can compare the effects of market volatilities on Jpmorgan Equity and Aquagold International 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 Equity with a short position of Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Equity and Aquagold International.

Diversification Opportunities for Jpmorgan Equity and Aquagold International

0.0

Correlation Coefficient

Jpmorgan Equity  Aquagold International

Pay attention - limited upside

The 3 months correlation between Jpmorgan and Aquagold is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Fund and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International and Jpmorgan Equity 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 Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of Jpmorgan Equity i.e., Jpmorgan Equity and Aquagold International go up and down completely randomly.

Pair Corralation between Jpmorgan Equity and Aquagold International

Assuming the 90 days horizon Jpmorgan Equity is expected to generate 36.7 times less return on investment than Aquagold International. But when comparing it to its historical volatility, Jpmorgan Equity Fund is 57.96 times less risky than Aquagold International. It trades about 0.09 of its potential returns per unit of risk. Aquagold International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Aquagold International on September 21, 2024 and sell it today you would lose (16.40) from holding Aquagold International or give up 96.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Jpmorgan Equity Fund  vs.  Aquagold International

Jpmorgan Equity

Risk-Adjusted Performance

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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 Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aquagold International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Jpmorgan Equity and Aquagold International

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

The idea behind Jpmorgan Equity Fund and Aquagold International 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.