Correlation Between Aam Select and Jpmorgan Equity
Can any of the company-specific risk be diversified away by investing in both Aam Select 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 Aam Select and Jpmorgan Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aam Select Income and Jpmorgan Equity Income, you can compare the effects of market volatilities on Aam Select 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 Aam Select with a short position of Jpmorgan Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Jpmorgan Equity.
Diversification Opportunities for Aam Select and Jpmorgan Equity
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aam and Jpmorgan is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and Jpmorgan Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Equity Income and Aam Select 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 Aam Select Income 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 Income has no effect on the direction of Aam Select i.e., Aam Select and Jpmorgan Equity go up and down completely randomly.
Pair Corralation between Aam Select and Jpmorgan Equity
Assuming the 90 days horizon Aam Select is expected to generate 6.15 times less return on investment than Jpmorgan Equity. But when comparing it to its historical volatility, Aam Select Income is 1.98 times less risky than Jpmorgan Equity. It trades about 0.1 of its potential returns per unit of risk. Jpmorgan Equity Income is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,600 in Jpmorgan Equity Income on September 1, 2024 and sell it today you would earn a total of 150.00 from holding Jpmorgan Equity Income or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aam Select Income vs. Jpmorgan Equity Income
Performance |
| Timeline |
| Aam Select Income |
| Jpmorgan Equity Income |
Aam Select and Jpmorgan Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Jpmorgan Equity
The main advantage of trading using opposite Aam Select and Jpmorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select 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.| Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aambahl Gaynor Income | Aam Select vs. Aam Select Income |
| Jpmorgan Equity vs. Aam Select Income | Jpmorgan Equity vs. Fa 529 Aggressive | Jpmorgan Equity vs. Qs Large Cap | Jpmorgan Equity vs. Volumetric Fund Volumetric |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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