Correlation Between Jpmorgan Europe and Fidelity Advisor

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

By analyzing existing cross correlation between Jpmorgan Europe Dynamic and Fidelity Advisor Energy, you can compare the effects of market volatilities on Jpmorgan Europe and Fidelity Advisor 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 Europe with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Europe and Fidelity Advisor.

Diversification Opportunities for Jpmorgan Europe and Fidelity Advisor

-0.11

Correlation Coefficient

Jpmorgan Europe  Fidelity Advisor

Good diversification

The 3 months correlation between Jpmorgan and Fidelity is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Europe Dynamic and Fidelity Advisor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Energy and Jpmorgan Europe 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 Europe Dynamic are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Energy has no effect on the direction of Jpmorgan Europe i.e., Jpmorgan Europe and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Jpmorgan Europe and Fidelity Advisor

Assuming the 90 days horizon Jpmorgan Europe Dynamic is expected to generate 0.84 times more return on investment than Fidelity Advisor. However, Jpmorgan Europe Dynamic is 1.2 times less risky than Fidelity Advisor. It trades about 0.18 of its potential returns per unit of risk. Fidelity Advisor Energy is currently generating about 0.01 per unit of risk. If you would invest  3,365  in Jpmorgan Europe Dynamic on December 23, 2024 and sell it today you would earn a total of  162.00  from holding Jpmorgan Europe Dynamic or generate 4.81% return on investment over 90 days.

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

Jpmorgan Europe Dynamic  vs.  Fidelity Advisor Energy

Jpmorgan Europe Dynamic

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Europe Dynamic are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Jpmorgan Europe showed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Advisor Energy

Risk-Adjusted Performance

OK

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

Pair Trading with Jpmorgan Europe and Fidelity Advisor

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

The idea behind Jpmorgan Europe Dynamic and Fidelity Advisor Energy 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.

Check out your portfolio center.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.