Correlation Between JPMorgan Japanese and Various Eateries

Can any of the company-specific risk be diversified away by investing in both JPMorgan Japanese and Various Eateries 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 Japanese and Various Eateries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JPMorgan Japanese Investment and Various Eateries PLC, you can compare the effects of market volatilities on JPMorgan Japanese and Various Eateries 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 Japanese with a short position of Various Eateries. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Japanese and Various Eateries.

Diversification Opportunities for JPMorgan Japanese and Various Eateries

-0.3

Correlation Coefficient

JPMorgan Japanese  Various Eateries

Very good diversification

The 3 months correlation between JPMorgan and Various is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Japanese Investment and Various Eateries PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Various Eateries PLC and JPMorgan Japanese 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 Japanese Investment are associated (or correlated) with Various Eateries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Various Eateries PLC has no effect on the direction of JPMorgan Japanese i.e., JPMorgan Japanese and Various Eateries go up and down completely randomly.

Pair Corralation between JPMorgan Japanese and Various Eateries

Assuming the 90 days trading horizon JPMorgan Japanese Investment is expected to generate 3.06 times more return on investment than Various Eateries. However, JPMorgan Japanese is 3.06 times more volatile than Various Eateries PLC. It trades about 0.1 of its potential returns per unit of risk. Various Eateries PLC is currently generating about -0.12 per unit of risk. If you would invest  53,600  in JPMorgan Japanese Investment on September 15, 2024 and sell it today you would earn a total of  3,600  from holding JPMorgan Japanese Investment or generate 6.72% return on investment over 90 days.

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

JPMorgan Japanese Investment  vs.  Various Eateries PLC

JPMorgan Japanese

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Japanese Investment are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, JPMorgan Japanese may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Various Eateries PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with JPMorgan Japanese and Various Eateries

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

The idea behind JPMorgan Japanese Investment and Various Eateries PLC 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.