Correlation Between JPM America and ALM Classic
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By analyzing existing cross correlation between JPM America Equity and ALM Classic RA, you can compare the effects of market volatilities on JPM America and ALM Classic 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 JPM America with a short position of ALM Classic. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPM America and ALM Classic.
Diversification Opportunities for JPM America and ALM Classic
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPM and ALM is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding JPM America Equity and ALM Classic RA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALM Classic RA and JPM America 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 JPM America Equity are associated (or correlated) with ALM Classic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALM Classic RA has no effect on the direction of JPM America i.e., JPM America and ALM Classic go up and down completely randomly.
Pair Corralation between JPM America and ALM Classic
Assuming the 90 days trading horizon JPM America Equity is expected to generate 4.36 times more return on investment than ALM Classic. However, JPM America is 4.36 times more volatile than ALM Classic RA. It trades about 0.11 of its potential returns per unit of risk. ALM Classic RA is currently generating about 0.13 per unit of risk. If you would invest 36,013 in JPM America Equity on September 10, 2024 and sell it today you would earn a total of 8,731 from holding JPM America Equity or generate 24.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 41.15% |
Values | Daily Returns |
JPM America Equity vs. ALM Classic RA
Performance |
Timeline |
JPM America Equity |
ALM Classic RA |
JPM America and ALM Classic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JPM America and ALM Classic
The main advantage of trading using opposite JPM America and ALM Classic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPM America position performs unexpectedly, ALM Classic 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 ALM Classic will offset losses from the drop in ALM Classic's long position.JPM America vs. JPM Global Natural | JPM America vs. JPM Europe Small | JPM America vs. JPM Emerging Markets | JPM America vs. Esfera Robotics R |
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Check out your portfolio center.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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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