Correlation Between Jpmorgan Emerging and Qs International

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

By analyzing existing cross correlation between Jpmorgan Emerging Markets and Qs International Equity, you can compare the effects of market volatilities on Jpmorgan Emerging and Qs International 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 Emerging with a short position of Qs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Emerging and Qs International.

Diversification Opportunities for Jpmorgan Emerging and Qs International

0.49

Correlation Coefficient

Jpmorgan Emerging  Qs International

Very weak diversification

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

Pair Corralation between Jpmorgan Emerging and Qs International

Assuming the 90 days horizon Jpmorgan Emerging Markets is expected to under-perform the Qs International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jpmorgan Emerging Markets is 1.05 times less risky than Qs International. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Qs International Equity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,828  in Qs International Equity on September 5, 2024 and sell it today you would earn a total of  22.00  from holding Qs International Equity or generate 1.2% return on investment over 90 days.

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

Jpmorgan Emerging Markets  vs.  Qs International Equity

Jpmorgan Emerging Markets

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Emerging Markets are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, Jpmorgan Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Qs International Equity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jpmorgan Emerging and Qs International

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

The idea behind Jpmorgan Emerging Markets and Qs International Equity 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.