Correlation Between Apple and Jpmorgan Small

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Can any of the company-specific risk be diversified away by investing in both Apple and Jpmorgan Small 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 Apple and Jpmorgan Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Jpmorgan Small Cap, you can compare the effects of market volatilities on Apple and Jpmorgan Small 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 Apple with a short position of Jpmorgan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Jpmorgan Small.

Diversification Opportunities for Apple and Jpmorgan Small

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Apple and Jpmorgan is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and JPMORGAN SMALL CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Small Cap and Apple 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 Apple Inc are associated (or correlated) with Jpmorgan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Small Cap has no effect on the direction of Apple i.e., Apple and Jpmorgan Small go up and down completely randomly.

Pair Corralation between Apple and Jpmorgan Small

Given the investment horizon of 90 days Apple Inc is expected to generate 1.16 times more return on investment than Jpmorgan Small. However, Apple is 1.16 times more volatile than Jpmorgan Small Cap. It trades about 0.03 of its potential returns per unit of risk. Jpmorgan Small Cap is currently generating about 0.01 per unit of risk. If you would invest  14,725  in Apple Inc on December 29, 2023 and sell it today you would earn a total of  2,606  from holding Apple Inc or generate 17.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Apple Inc  vs.  JPMORGAN SMALL CAP

 Performance 
       Timeline  
Apple Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
Jpmorgan Small Cap 

Risk-Adjusted Performance

2 of 100

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

Apple and Jpmorgan Small Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and Jpmorgan Small

The main advantage of trading using opposite Apple and Jpmorgan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Jpmorgan Small 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 Small will offset losses from the drop in Jpmorgan Small's long position.
The idea behind Apple Inc and Jpmorgan Small Cap 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.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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