Correlation Between Solana and Jpmorgan International

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

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

Diversification Opportunities for Solana and Jpmorgan International

0.82

Correlation Coefficient

Solana  Jpmorgan International

Very poor diversification

The 3 months correlation between Solana and Jpmorgan is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Solana and Jpmorgan International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan International and Solana 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 Solana are associated (or correlated) with Jpmorgan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan International has no effect on the direction of Solana i.e., Solana and Jpmorgan International go up and down completely randomly.

Pair Corralation between Solana and Jpmorgan International

Assuming the 90 days trading horizon Solana is expected to under-perform the Jpmorgan International. In addition to that, Solana is 6.34 times more volatile than Jpmorgan International Equity. It trades about -0.24 of its total potential returns per unit of risk. Jpmorgan International Equity is currently generating about -0.12 per unit of volatility. If you would invest  1,956  in Jpmorgan International Equity on January 30, 2024 and sell it today you would lose (34.00) from holding Jpmorgan International Equity or give up 1.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Solana  vs.  Jpmorgan International Equity

Solana

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Solana are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Solana exhibited solid returns over the last few months and may actually be approaching a breakup point.

Jpmorgan International

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Solana and Jpmorgan International

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

The idea behind Solana and Jpmorgan International Equity 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.