Correlation Between Invesco Gold and Jpmorgan Investor

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

By analyzing existing cross correlation between Invesco Gold Special and Jpmorgan Investor Growth, you can compare the effects of market volatilities on Invesco Gold and Jpmorgan Investor 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 Invesco Gold with a short position of Jpmorgan Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Gold and Jpmorgan Investor.

Diversification Opportunities for Invesco Gold and Jpmorgan Investor

-0.06

Correlation Coefficient

Invesco Gold  Jpmorgan Investor

Good diversification

The 3 months correlation between Invesco and Jpmorgan is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Gold Special and Jpmorgan Investor Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Investor Growth and Invesco Gold 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 Invesco Gold Special are associated (or correlated) with Jpmorgan Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Investor Growth has no effect on the direction of Invesco Gold i.e., Invesco Gold and Jpmorgan Investor go up and down completely randomly.

Pair Corralation between Invesco Gold and Jpmorgan Investor

Assuming the 90 days horizon Invesco Gold is expected to generate 1.55 times less return on investment than Jpmorgan Investor. In addition to that, Invesco Gold is 2.44 times more volatile than Jpmorgan Investor Growth. It trades about 0.02 of its total potential returns per unit of risk. Jpmorgan Investor Growth is currently generating about 0.09 per unit of volatility. If you would invest  1,991  in Jpmorgan Investor Growth on September 26, 2024 and sell it today you would earn a total of  719.00  from holding Jpmorgan Investor Growth or generate 36.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Invesco Gold Special  vs.  Jpmorgan Investor Growth

Invesco Gold Special

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jpmorgan Investor Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Investor Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Jpmorgan Investor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Invesco Gold and Jpmorgan Investor

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

The idea behind Invesco Gold Special and Jpmorgan Investor Growth 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.