Correlation Between Causeway International and Jpmorgan Value
Can any of the company-specific risk be diversified away by investing in both Causeway International and Jpmorgan Value 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 Causeway International and Jpmorgan Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Causeway International Value and Jpmorgan Value Advantage, you can compare the effects of market volatilities on Causeway International and Jpmorgan Value 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 Causeway International with a short position of Jpmorgan Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Causeway International and Jpmorgan Value.
Diversification Opportunities for Causeway International and Jpmorgan Value
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Causeway and Jpmorgan is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Causeway International Value and Jpmorgan Value Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Value Advantage and Causeway International 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 Causeway International Value are associated (or correlated) with Jpmorgan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Value Advantage has no effect on the direction of Causeway International i.e., Causeway International and Jpmorgan Value go up and down completely randomly.
Pair Corralation between Causeway International and Jpmorgan Value
Assuming the 90 days horizon Causeway International Value is expected to under-perform the Jpmorgan Value. But the mutual fund apears to be less risky and, when comparing its historical volatility, Causeway International Value is 1.15 times less risky than Jpmorgan Value. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Jpmorgan Value Advantage is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 4,156 in Jpmorgan Value Advantage on September 3, 2024 and sell it today you would earn a total of 310.00 from holding Jpmorgan Value Advantage or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Causeway International Value vs. Jpmorgan Value Advantage
Performance |
| Timeline |
| Causeway International |
| Jpmorgan Value Advantage |
Causeway International and Jpmorgan Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Causeway International and Jpmorgan Value
The main advantage of trading using opposite Causeway International and Jpmorgan Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Causeway International position performs unexpectedly, Jpmorgan Value 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 Value will offset losses from the drop in Jpmorgan Value's long position.The idea behind Causeway International Value and Jpmorgan Value Advantage 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.
| Jpmorgan Value vs. Jpmorgan Mid Cap | Jpmorgan Value vs. Jpmorgan Equity Fund | Jpmorgan Value vs. Massachusetts Investors Trust | Jpmorgan Value vs. Causeway International Value |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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