Correlation Between JPM Green and Multi Units

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

By analyzing existing cross correlation between JPM Green Social and Multi Units Luxembourg, you can compare the effects of market volatilities on JPM Green and Multi Units 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 JPM Green with a short position of Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPM Green and Multi Units.

Diversification Opportunities for JPM Green and Multi Units

0.61

Correlation Coefficient

JPM Green  Multi Units

Poor diversification

The 3 months correlation between JPM and Multi is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding JPM Green Social and Multi Units Luxembourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units Luxembourg and JPM Green 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 JPM Green Social are associated (or correlated) with Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units Luxembourg has no effect on the direction of JPM Green i.e., JPM Green and Multi Units go up and down completely randomly.

Pair Corralation between JPM Green and Multi Units

Assuming the 90 days trading horizon JPM Green is expected to generate 4.67 times less return on investment than Multi Units. But when comparing it to its historical volatility, JPM Green Social is 3.03 times less risky than Multi Units. It trades about 0.14 of its potential returns per unit of risk. Multi Units Luxembourg is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  351,000  in Multi Units Luxembourg on April 24, 2025 and sell it today you would earn a total of  52,775  from holding Multi Units Luxembourg or generate 15.04% return on investment over 90 days.

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

JPM Green Social  vs.  Multi Units Luxembourg

JPM Green Social

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPM Green Social are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JPM Green is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Multi Units Luxembourg

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Units Luxembourg are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Multi Units exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPM Green and Multi Units

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

The idea behind JPM Green Social and Multi Units Luxembourg 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.