Correlation Between Gear4music (Holdings) and JPMorgan Global

Can any of the company-specific risk be diversified away by investing in both Gear4music (Holdings) and JPMorgan 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 Gear4music (Holdings) and JPMorgan Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gear4music Plc and JPMorgan Global Emerging, you can compare the effects of market volatilities on Gear4music (Holdings) and JPMorgan 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 Gear4music (Holdings) with a short position of JPMorgan Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gear4music (Holdings) and JPMorgan Global.

Diversification Opportunities for Gear4music (Holdings) and JPMorgan Global

-0.49

Correlation Coefficient

Gear4music (Holdings)  JPMorgan Global

Very good diversification

The 3 months correlation between Gear4music and JPMorgan is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Gear4music Plc and JPMorgan Global Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Global Emerging and Gear4music (Holdings) 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 Gear4music Plc are associated (or correlated) with JPMorgan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Global Emerging has no effect on the direction of Gear4music (Holdings) i.e., Gear4music (Holdings) and JPMorgan Global go up and down completely randomly.

Pair Corralation between Gear4music (Holdings) and JPMorgan Global

Assuming the 90 days trading horizon Gear4music Plc is expected to under-perform the JPMorgan Global. In addition to that, Gear4music (Holdings) is 1.88 times more volatile than JPMorgan Global Emerging. It trades about -0.11 of its total potential returns per unit of risk. JPMorgan Global Emerging is currently generating about 0.01 per unit of volatility. If you would invest  13,102  in JPMorgan Global Emerging on August 30, 2024 and sell it today you would earn a total of  48.00  from holding JPMorgan Global Emerging or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Gear4music Plc  vs.  JPMorgan Global Emerging

Gear4music (Holdings)

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gear4music Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

JPMorgan Global Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Global Emerging has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, JPMorgan Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gear4music (Holdings) and JPMorgan Global

The main advantage of trading using opposite Gear4music (Holdings) and JPMorgan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gear4music (Holdings) position performs unexpectedly, JPMorgan 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 JPMorgan Global will offset losses from the drop in JPMorgan Global's long position.

The idea behind Gear4music Plc and JPMorgan Global Emerging 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 CEOs Directory module to screen CEOs from public companies around the world.