Correlation Between American Funds and Jpmorgan Smartretirement
Can any of the company-specific risk be diversified away by investing in both American Funds and Jpmorgan Smartretirement 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 American Funds and Jpmorgan Smartretirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2035 and Jpmorgan Smartretirement 2035, you can compare the effects of market volatilities on American Funds and Jpmorgan Smartretirement 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 American Funds with a short position of Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Jpmorgan Smartretirement.
Diversification Opportunities for American Funds and Jpmorgan Smartretirement
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Jpmorgan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2035 and Jpmorgan Smartretirement 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement and American Funds 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 American Funds 2035 are associated (or correlated) with Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of American Funds i.e., American Funds and Jpmorgan Smartretirement go up and down completely randomly.
Pair Corralation between American Funds and Jpmorgan Smartretirement
Assuming the 90 days horizon American Funds 2035 is expected to generate 0.99 times more return on investment than Jpmorgan Smartretirement. However, American Funds 2035 is 1.01 times less risky than Jpmorgan Smartretirement. It trades about 0.28 of its potential returns per unit of risk. Jpmorgan Smartretirement 2035 is currently generating about 0.26 per unit of risk. If you would invest 1,948 in American Funds 2035 on September 1, 2024 and sell it today you would earn a total of 52.00 from holding American Funds 2035 or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2035 vs. Jpmorgan Smartretirement 2035
Performance |
| Timeline |
| American Funds 2035 |
| Jpmorgan Smartretirement |
American Funds and Jpmorgan Smartretirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Jpmorgan Smartretirement
The main advantage of trading using opposite American Funds and Jpmorgan Smartretirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Jpmorgan Smartretirement 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 Smartretirement will offset losses from the drop in Jpmorgan Smartretirement's long position.| American Funds vs. American Funds 2030 | American Funds vs. American Funds 2040 | American Funds vs. American Funds 2045 | American Funds vs. American Funds 2025 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |