Correlation Between Mayfair Gold and JPM P

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

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

Diversification Opportunities for Mayfair Gold and JPM P

-0.15

Correlation Coefficient

Mayfair Gold  JPM P

Good diversification

The 3 months correlation between Mayfair and JPM is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold Corp 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 Mayfair Gold 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 Mayfair Gold Corp 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 Mayfair Gold i.e., Mayfair Gold and JPM P go up and down completely randomly.

Pair Corralation between Mayfair Gold and JPM P

Assuming the 90 days horizon Mayfair Gold Corp is expected to generate 3.53 times more return on investment than JPM P. However, Mayfair Gold is 3.53 times more volatile than JPM P J. It trades about 0.02 of its potential returns per unit of risk. JPM P J is currently generating about 0.02 per unit of risk. If you would invest  123.00  in Mayfair Gold Corp on December 21, 2024 and sell it today you would earn a total of  1.00  from holding Mayfair Gold Corp or generate 0.81% return on investment over 90 days.

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

Mayfair Gold Corp  vs.  JPM P J

Mayfair Gold Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mayfair Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Mayfair Gold is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

JPM P J

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JPM P J are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady forward-looking indicators, JPM P is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Mayfair Gold and JPM P

The main advantage of trading using opposite Mayfair Gold and JPM P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayfair Gold 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 Mayfair Gold Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.