Correlation Between Jpmorgan Equity and Shelton Emerging

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Can any of the company-specific risk be diversified away by investing in both Jpmorgan Equity and Shelton Emerging 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 Shelton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Equity Index and Shelton Emerging Markets, you can compare the effects of market volatilities on Jpmorgan Equity and Shelton Emerging 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 Shelton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Equity and Shelton Emerging.

Diversification Opportunities for Jpmorgan Equity and Shelton Emerging

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Jpmorgan and Shelton is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Index and Shelton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Emerging Markets 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 Index are associated (or correlated) with Shelton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Emerging Markets has no effect on the direction of Jpmorgan Equity i.e., Jpmorgan Equity and Shelton Emerging go up and down completely randomly.

Pair Corralation between Jpmorgan Equity and Shelton Emerging

Assuming the 90 days horizon Jpmorgan Equity Index is expected to generate 0.81 times more return on investment than Shelton Emerging. However, Jpmorgan Equity Index is 1.23 times less risky than Shelton Emerging. It trades about -0.16 of its potential returns per unit of risk. Shelton Emerging Markets is currently generating about -0.2 per unit of risk. If you would invest  9,076  in Jpmorgan Equity Index on October 4, 2024 and sell it today you would lose (269.00) from holding Jpmorgan Equity Index or give up 2.96% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Jpmorgan Equity Index  vs.  Shelton Emerging Markets

 Performance 
       Timeline  
Jpmorgan Equity Index 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Equity Index are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. 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.
Shelton Emerging Markets 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Shelton Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's essential indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Jpmorgan Equity and Shelton Emerging Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jpmorgan Equity and Shelton Emerging

The main advantage of trading using opposite Jpmorgan Equity and Shelton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Equity position performs unexpectedly, Shelton Emerging 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 Shelton Emerging will offset losses from the drop in Shelton Emerging's long position.
The idea behind Jpmorgan Equity Index and Shelton Emerging Markets 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 Transaction History module to view history of all your transactions and understand their impact on performance.

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