Correlation Between Short Oil and Jpmorgan Core

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

By analyzing existing cross correlation between Short Oil Gas and Jpmorgan E Bond, you can compare the effects of market volatilities on Short Oil and Jpmorgan Core 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 Short Oil with a short position of Jpmorgan Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Oil and Jpmorgan Core.

Diversification Opportunities for Short Oil and Jpmorgan Core

-0.18

Correlation Coefficient

Short Oil  Jpmorgan Core

Good diversification

The 3 months correlation between Short and Jpmorgan is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Short Oil Gas and Jpmorgan E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan E Bond and Short Oil 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 Short Oil Gas are associated (or correlated) with Jpmorgan Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan E Bond has no effect on the direction of Short Oil i.e., Short Oil and Jpmorgan Core go up and down completely randomly.

Pair Corralation between Short Oil and Jpmorgan Core

Assuming the 90 days horizon Short Oil Gas is expected to generate 4.24 times more return on investment than Jpmorgan Core. However, Short Oil is 4.24 times more volatile than Jpmorgan E Bond. It trades about 0.1 of its potential returns per unit of risk. Jpmorgan E Bond is currently generating about 0.27 per unit of risk. If you would invest  1,373  in Short Oil Gas on December 11, 2024 and sell it today you would earn a total of  38.00  from holding Short Oil Gas or generate 2.77% return on investment over 90 days.

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

Short Oil Gas  vs.  Jpmorgan E Bond

Short Oil Gas

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Short Oil Gas are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Short Oil is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan E Bond

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan E Bond are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Short Oil and Jpmorgan Core

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

The idea behind Short Oil Gas and Jpmorgan E Bond 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.