Correlation Between Small Pany and Jpmorgan International

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

By analyzing existing cross correlation between Small Pany Growth and Jpmorgan International Value, you can compare the effects of market volatilities on Small Pany and Jpmorgan 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 Small Pany with a short position of Jpmorgan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Pany and Jpmorgan International.

Diversification Opportunities for Small Pany and Jpmorgan International

-0.55

Correlation Coefficient

Small Pany  Jpmorgan International

Excellent diversification

The 3 months correlation between Small and Jpmorgan is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Growth and Jpmorgan International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan International and Small Pany 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 Small Pany Growth are associated (or correlated) with Jpmorgan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan International has no effect on the direction of Small Pany i.e., Small Pany and Jpmorgan International go up and down completely randomly.

Pair Corralation between Small Pany and Jpmorgan International

Assuming the 90 days horizon Small Pany Growth is expected to under-perform the Jpmorgan International. In addition to that, Small Pany is 2.64 times more volatile than Jpmorgan International Value. It trades about -0.06 of its total potential returns per unit of risk. Jpmorgan International Value is currently generating about 0.28 per unit of volatility. If you would invest  1,404  in Jpmorgan International Value on December 27, 2024 and sell it today you would earn a total of  210.00  from holding Jpmorgan International Value or generate 14.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Small Pany Growth  vs.  Jpmorgan International Value

Small Pany Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Small Pany Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Jpmorgan International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan International Value are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Jpmorgan International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Small Pany and Jpmorgan International

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

The idea behind Small Pany Growth and Jpmorgan International Value 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.