Correlation Between Kopernik Global and Jpmorgan Equity

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

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

Diversification Opportunities for Kopernik Global and Jpmorgan Equity

-0.47

Correlation Coefficient

Kopernik Global  Jpmorgan Equity

Very good diversification

The 3 months correlation between Kopernik and Jpmorgan is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kopernik Global All Cap 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 Kopernik Global 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 Kopernik Global All Cap 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 Kopernik Global i.e., Kopernik Global and Jpmorgan Equity go up and down completely randomly.

Pair Corralation between Kopernik Global and Jpmorgan Equity

Assuming the 90 days horizon Kopernik Global All Cap is expected to under-perform the Jpmorgan Equity. In addition to that, Kopernik Global is 1.9 times more volatile than Jpmorgan Equity Premium. It trades about -0.04 of its total potential returns per unit of risk. Jpmorgan Equity Premium is currently generating about 0.11 per unit of volatility. If you would invest  1,438  in Jpmorgan Equity Premium on September 17, 2024 and sell it today you would earn a total of  39.00  from holding Jpmorgan Equity Premium or generate 2.71% return on investment over 90 days.

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

Kopernik Global All Cap  vs.  Jpmorgan Equity Premium

Kopernik Global All

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kopernik Global All Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Kopernik Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan Equity Premium

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Equity Premium are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Jpmorgan Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kopernik Global and Jpmorgan Equity

The main advantage of trading using opposite Kopernik Global and Jpmorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kopernik Global 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 Kopernik Global All Cap 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.