Correlation Between JPMorgan 100Q and JPMorgan Equity

Can any of the company-specific risk be diversified away by investing in both JPMorgan 100Q and JPMorgan Equity 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 100Q and JPMorgan Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JPMorgan 100Q Equity and JPMorgan Equity Premium, you can compare the effects of market volatilities on JPMorgan 100Q and JPMorgan Equity 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 100Q with a short position of JPMorgan Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan 100Q and JPMorgan Equity.

Diversification Opportunities for JPMorgan 100Q and JPMorgan Equity

0.79

Correlation Coefficient

JPMorgan 100Q  JPMorgan Equity

Poor diversification

The 3 months correlation between JPMorgan and JPMorgan is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan 100Q Equity and JPMorgan Equity Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Equity Premium and JPMorgan 100Q 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 100Q Equity are associated (or correlated) with JPMorgan Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Equity Premium has no effect on the direction of JPMorgan 100Q i.e., JPMorgan 100Q and JPMorgan Equity go up and down completely randomly.

Pair Corralation between JPMorgan 100Q and JPMorgan Equity

Assuming the 90 days trading horizon JPMorgan 100Q Equity is expected to generate 0.64 times more return on investment than JPMorgan Equity. However, JPMorgan 100Q Equity is 1.55 times less risky than JPMorgan Equity. It trades about 0.36 of its potential returns per unit of risk. JPMorgan Equity Premium is currently generating about 0.14 per unit of risk. If you would invest  5,551  in JPMorgan 100Q Equity on September 27, 2024 and sell it today you would earn a total of  1,043  from holding JPMorgan 100Q Equity or generate 18.79% return on investment over 90 days.

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

JPMorgan 100Q Equity  vs.  JPMorgan Equity Premium

JPMorgan 100Q Equity

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days JPMorgan 100Q Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, JPMorgan 100Q unveiled solid returns over the last few months and may actually be approaching a breakup point.

JPMorgan Equity Premium

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Equity Premium are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JPMorgan Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JPMorgan 100Q and JPMorgan Equity

The main advantage of trading using opposite JPMorgan 100Q and JPMorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan 100Q position performs unexpectedly, JPMorgan Equity 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 Equity will offset losses from the drop in JPMorgan Equity's long position.

The idea behind JPMorgan 100Q Equity and JPMorgan Equity Premium 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.