Correlation Between Ab Municipal and Jpmorgan Large
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Jpmorgan Large 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 Municipal and Jpmorgan Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Municipal Bond and Jpmorgan Large Cap, you can compare the effects of market volatilities on Ab Municipal and Jpmorgan Large 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 Municipal with a short position of Jpmorgan Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Jpmorgan Large.
Diversification Opportunities for Ab Municipal and Jpmorgan Large
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUNYX and Jpmorgan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Jpmorgan Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Large Cap and Ab Municipal 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 Municipal Bond are associated (or correlated) with Jpmorgan Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Large Cap has no effect on the direction of Ab Municipal i.e., Ab Municipal and Jpmorgan Large go up and down completely randomly.
Pair Corralation between Ab Municipal and Jpmorgan Large
Assuming the 90 days horizon Ab Municipal is expected to generate 12.15 times less return on investment than Jpmorgan Large. But when comparing it to its historical volatility, Ab Municipal Bond is 6.7 times less risky than Jpmorgan Large. It trades about 0.18 of its potential returns per unit of risk. Jpmorgan Large Cap is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,100 in Jpmorgan Large Cap on August 31, 2024 and sell it today you would earn a total of 152.00 from holding Jpmorgan Large Cap or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ab Municipal Bond vs. Jpmorgan Large Cap
Performance |
| Timeline |
| Ab Municipal Bond |
| Jpmorgan Large Cap |
Ab Municipal and Jpmorgan Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Jpmorgan Large
The main advantage of trading using opposite Ab Municipal and Jpmorgan Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Jpmorgan Large 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 Large will offset losses from the drop in Jpmorgan Large's long position.| Ab Municipal vs. Nationwide Inflation Protected Securities | Ab Municipal vs. Lord Abbett Inflation | Ab Municipal vs. The Hartford Inflation | Ab Municipal vs. Ab Bond Inflation |
| Jpmorgan Large vs. Nationwide Inflation Protected Securities | Jpmorgan Large vs. Lord Abbett Inflation | Jpmorgan Large vs. Guidepath Managed Futures | Jpmorgan Large vs. Ab Bond Inflation |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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