Correlation Between Jpmorgan Equity and Oberweis China

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

By analyzing existing cross correlation between Jpmorgan Equity Income and Oberweis China Opportunities, you can compare the effects of market volatilities on Jpmorgan Equity and Oberweis China 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 Oberweis China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Equity and Oberweis China.

Diversification Opportunities for Jpmorgan Equity and Oberweis China

0.29

Correlation Coefficient

Jpmorgan Equity  Oberweis China

Modest diversification

The 3 months correlation between JPMORGAN and OBERWEIS is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Income and Oberweis China Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis China Oppor 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 Income are associated (or correlated) with Oberweis China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis China Oppor has no effect on the direction of Jpmorgan Equity i.e., Jpmorgan Equity and Oberweis China go up and down completely randomly.

Pair Corralation between Jpmorgan Equity and Oberweis China

Assuming the 90 days horizon Jpmorgan Equity is expected to generate 1.09 times less return on investment than Oberweis China. But when comparing it to its historical volatility, Jpmorgan Equity Income is 3.06 times less risky than Oberweis China. It trades about 0.19 of its potential returns per unit of risk. Oberweis China Opportunities is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  659.00  in Oberweis China Opportunities on September 2, 2024 and sell it today you would earn a total of  51.00  from holding Oberweis China Opportunities or generate 7.74% return on investment over 90 days.

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

Jpmorgan Equity Income  vs.  Oberweis China Opportunities

Jpmorgan Equity Income

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Equity Income are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Jpmorgan Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Oberweis China Oppor

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oberweis China Opportunities are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Oberweis China may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jpmorgan Equity and Oberweis China

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

The idea behind Jpmorgan Equity Income and Oberweis China Opportunities 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.