Correlation Between Jpmorgan Large and Leland Thomson

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

By analyzing existing cross correlation between Jpmorgan Large Cap and Leland Thomson Reuters, you can compare the effects of market volatilities on Jpmorgan Large and Leland Thomson 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 Large with a short position of Leland Thomson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Large and Leland Thomson.

Diversification Opportunities for Jpmorgan Large and Leland Thomson

0.92

Correlation Coefficient

Jpmorgan Large  Leland Thomson

Almost no diversification

The 3 months correlation between Jpmorgan and Leland is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Large Cap and Leland Thomson Reuters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leland Thomson Reuters and Jpmorgan Large 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 Large Cap are associated (or correlated) with Leland Thomson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leland Thomson Reuters has no effect on the direction of Jpmorgan Large i.e., Jpmorgan Large and Leland Thomson go up and down completely randomly.

Pair Corralation between Jpmorgan Large and Leland Thomson

Assuming the 90 days horizon Jpmorgan Large is expected to generate 1.56 times less return on investment than Leland Thomson. But when comparing it to its historical volatility, Jpmorgan Large Cap is 1.34 times less risky than Leland Thomson. It trades about 0.05 of its potential returns per unit of risk. Leland Thomson Reuters is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,083  in Leland Thomson Reuters on September 29, 2024 and sell it today you would earn a total of  266.00  from holding Leland Thomson Reuters or generate 12.77% return on investment over 90 days.

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

Jpmorgan Large Cap  vs.  Leland Thomson Reuters

Jpmorgan Large Cap

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Large Cap are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jpmorgan Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Leland Thomson Reuters

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Leland Thomson Reuters are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Leland Thomson may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jpmorgan Large and Leland Thomson

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

The idea behind Jpmorgan Large Cap and Leland Thomson Reuters 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.