Correlation Between Ab Impact and Jpmorgan Equity
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Jpmorgan Equity 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 Ab Impact and Jpmorgan Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Impact Municipal and Jpmorgan Equity Index, you can compare the effects of market volatilities on Ab Impact and Jpmorgan Equity 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 Ab Impact with a short position of Jpmorgan Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Jpmorgan Equity.
Diversification Opportunities for Ab Impact and Jpmorgan Equity
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABIMX and Jpmorgan is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Jpmorgan Equity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Equity Index and Ab Impact 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 Ab Impact Municipal are associated (or correlated) with Jpmorgan Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Equity Index has no effect on the direction of Ab Impact i.e., Ab Impact and Jpmorgan Equity go up and down completely randomly.
Pair Corralation between Ab Impact and Jpmorgan Equity
Assuming the 90 days horizon Ab Impact is expected to generate 3.13 times less return on investment than Jpmorgan Equity. But when comparing it to its historical volatility, Ab Impact Municipal is 1.9 times less risky than Jpmorgan Equity. It trades about 0.21 of its potential returns per unit of risk. Jpmorgan Equity Index is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 8,454 in Jpmorgan Equity Index on September 1, 2024 and sell it today you would earn a total of 489.00 from holding Jpmorgan Equity Index or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Impact Municipal vs. Jpmorgan Equity Index
Performance |
| Timeline |
| Ab Impact Municipal |
| Jpmorgan Equity Index |
Ab Impact and Jpmorgan Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Jpmorgan Equity
The main advantage of trading using opposite Ab Impact and Jpmorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Jpmorgan Equity 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 Equity will offset losses from the drop in Jpmorgan Equity's long position.| Ab Impact vs. Barings Emerging Markets | Ab Impact vs. Artisan Emerging Markets | Ab Impact vs. Black Oak Emerging | Ab Impact vs. Ashmore Emerging Markets |
| Jpmorgan Equity vs. California High Yield Municipal | Jpmorgan Equity vs. Pace Municipal Fixed | Jpmorgan Equity vs. Ab Impact Municipal | Jpmorgan Equity vs. Nuveen Minnesota Municipal |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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