Correlation Between JP Morgan and Freedom Holding

Can any of the company-specific risk be diversified away by investing in both JP Morgan and Freedom Holding 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 JP Morgan and Freedom Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JMP Group LLC and Freedom Holding Corp, you can compare the effects of market volatilities on JP Morgan and Freedom Holding 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 JP Morgan with a short position of Freedom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of JP Morgan and Freedom Holding.

Diversification Opportunities for JP Morgan and Freedom Holding

0.0

Correlation Coefficient

JP Morgan  Freedom Holding

Pay attention - limited upside

The 3 months correlation between JMP and Freedom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JMP Group LLC and Freedom Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Holding Corp and JP Morgan 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 JMP Group LLC are associated (or correlated) with Freedom Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Holding Corp has no effect on the direction of JP Morgan i.e., JP Morgan and Freedom Holding go up and down completely randomly.

Pair Corralation between JP Morgan and Freedom Holding

If you would invest (100.00) in JMP Group LLC on January 18, 2024 and sell it today you would earn a total of  100.00  from holding JMP Group LLC or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

JMP Group LLC  vs.  Freedom Holding Corp

JMP Group LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JMP Group LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, JP Morgan is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Freedom Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freedom Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with JP Morgan and Freedom Holding

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

The idea behind JMP Group LLC and Freedom Holding Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.