Correlation Between Kenon Holdings and JPM P

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

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

Diversification Opportunities for Kenon Holdings and JPM P

-0.54

Correlation Coefficient

Kenon Holdings  JPM P

Excellent diversification

The 3 months correlation between Kenon and JPM is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kenon Holdings and JPM P J in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM P J and Kenon Holdings 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 Kenon Holdings are associated (or correlated) with JPM P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM P J has no effect on the direction of Kenon Holdings i.e., Kenon Holdings and JPM P go up and down completely randomly.

Pair Corralation between Kenon Holdings and JPM P

Considering the 90-day investment horizon Kenon Holdings is expected to generate 2.05 times more return on investment than JPM P. However, Kenon Holdings is 2.05 times more volatile than JPM P J. It trades about 0.16 of its potential returns per unit of risk. JPM P J is currently generating about -0.16 per unit of risk. If you would invest  2,754  in Kenon Holdings on October 22, 2024 and sell it today you would earn a total of  583.00  from holding Kenon Holdings or generate 21.17% return on investment over 90 days.

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

Kenon Holdings  vs.  JPM P J

Kenon Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kenon Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Kenon Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

JPM P J

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPM P J has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Preferred Stock's forward-looking indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Pair Trading with Kenon Holdings and JPM P

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

The idea behind Kenon Holdings and JPM P J 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.