Correlation Between ZAVIT REAL and JPP CAPITAL

Can any of the company-specific risk be diversified away by investing in both ZAVIT REAL and JPP CAPITAL 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 ZAVIT REAL and JPP CAPITAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ZAVIT REAL ESTATE and JPP CAPITAL FDO, you can compare the effects of market volatilities on ZAVIT REAL and JPP CAPITAL 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 ZAVIT REAL with a short position of JPP CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZAVIT REAL and JPP CAPITAL.

Diversification Opportunities for ZAVIT REAL and JPP CAPITAL

-0.77

Correlation Coefficient

ZAVIT REAL  JPP CAPITAL

Pay attention - limited upside

The 3 months correlation between ZAVIT and JPP is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding ZAVIT REAL ESTATE and JPP CAPITAL FDO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPP CAPITAL FDO and ZAVIT REAL 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 ZAVIT REAL ESTATE are associated (or correlated) with JPP CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPP CAPITAL FDO has no effect on the direction of ZAVIT REAL i.e., ZAVIT REAL and JPP CAPITAL go up and down completely randomly.

Pair Corralation between ZAVIT REAL and JPP CAPITAL

Assuming the 90 days trading horizon ZAVIT REAL ESTATE is expected to under-perform the JPP CAPITAL. But the fund apears to be less risky and, when comparing its historical volatility, ZAVIT REAL ESTATE is 4.64 times less risky than JPP CAPITAL. The fund trades about -0.02 of its potential returns per unit of risk. The JPP CAPITAL FDO is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  10,799  in JPP CAPITAL FDO on October 12, 2024 and sell it today you would earn a total of  9,201  from holding JPP CAPITAL FDO or generate 85.2% return on investment over 90 days.

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

ZAVIT REAL ESTATE  vs.  JPP CAPITAL FDO

ZAVIT REAL ESTATE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZAVIT REAL ESTATE has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

JPP CAPITAL FDO

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPP CAPITAL FDO are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, JPP CAPITAL sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZAVIT REAL and JPP CAPITAL

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

The idea behind ZAVIT REAL ESTATE and JPP CAPITAL FDO 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.