Correlation Between Jpmorgan Equity and Alpine Global

Can any of the company-specific risk be diversified away by investing in both Jpmorgan Equity and Alpine Global 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 Alpine Global 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 Alpine Global Infrastructure, you can compare the effects of market volatilities on Jpmorgan Equity and Alpine Global 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 Alpine Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Equity and Alpine Global.

Diversification Opportunities for Jpmorgan Equity and Alpine Global

-0.48

Correlation Coefficient

Jpmorgan Equity  Alpine Global

Very good diversification

The 3 months correlation between Jpmorgan and Alpine is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Income and Alpine Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Global Infras 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 Alpine Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Global Infras has no effect on the direction of Jpmorgan Equity i.e., Jpmorgan Equity and Alpine Global go up and down completely randomly.

Pair Corralation between Jpmorgan Equity and Alpine Global

Assuming the 90 days horizon Jpmorgan Equity Income is expected to generate 1.12 times more return on investment than Alpine Global. However, Jpmorgan Equity is 1.12 times more volatile than Alpine Global Infrastructure. It trades about 0.11 of its potential returns per unit of risk. Alpine Global Infrastructure is currently generating about -0.09 per unit of risk. If you would invest  2,542  in Jpmorgan Equity Income on September 13, 2024 and sell it today you would earn a total of  116.00  from holding Jpmorgan Equity Income or generate 4.56% return on investment over 90 days.

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

Jpmorgan Equity Income  vs.  Alpine Global Infrastructure

Jpmorgan Equity Income

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Equity Income are ranked lower than 8 (%) 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.

Alpine Global Infras

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpine Global Infrastructure has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Alpine Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jpmorgan Equity and Alpine Global

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

The idea behind Jpmorgan Equity Income and Alpine Global Infrastructure 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.