Correlation Between Origin Emerging and Jpmorgan Emerging
Can any of the company-specific risk be diversified away by investing in both Origin Emerging and Jpmorgan Emerging 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 Origin Emerging and Jpmorgan Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Emerging Markets and Jpmorgan Emerging Markets, you can compare the effects of market volatilities on Origin Emerging and Jpmorgan Emerging 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 Origin Emerging with a short position of Jpmorgan Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Emerging and Jpmorgan Emerging.
Diversification Opportunities for Origin Emerging and Jpmorgan Emerging
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Origin and Jpmorgan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Origin Emerging Markets and Jpmorgan Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Emerging Markets and Origin 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 Origin Emerging Markets are associated (or correlated) with Jpmorgan Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Emerging Markets has no effect on the direction of Origin Emerging i.e., Origin Emerging and Jpmorgan Emerging go up and down completely randomly.
Pair Corralation between Origin Emerging and Jpmorgan Emerging
Assuming the 90 days horizon Origin Emerging Markets is expected to generate 0.88 times more return on investment than Jpmorgan Emerging. However, Origin Emerging Markets is 1.14 times less risky than Jpmorgan Emerging. It trades about -0.07 of its potential returns per unit of risk. Jpmorgan Emerging Markets is currently generating about -0.25 per unit of risk. If you would invest 1,013 in Origin Emerging Markets on January 20, 2024 and sell it today you would lose (10.00) from holding Origin Emerging Markets or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Origin Emerging Markets vs. Jpmorgan Emerging Markets
Performance |
| Timeline |
| Origin Emerging Markets |
| Jpmorgan Emerging Markets |
Origin Emerging and Jpmorgan Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Emerging and Jpmorgan Emerging
The main advantage of trading using opposite Origin Emerging and Jpmorgan Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Emerging position performs unexpectedly, Jpmorgan Emerging 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 Emerging will offset losses from the drop in Jpmorgan Emerging's long position.| Origin Emerging vs. Strategic Asset Management | Origin Emerging vs. Strategic Asset Management | Origin Emerging vs. Strategic Asset Management | Origin Emerging vs. Strategic Asset Management |
| Jpmorgan Emerging vs. Vanguard Emerging Markets | Jpmorgan Emerging vs. American Funds New | Jpmorgan Emerging vs. American Funds New | Jpmorgan Emerging vs. New World Fund |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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