Correlation Between Federated High and Jpmorgan Smartretirement
Can any of the company-specific risk be diversified away by investing in both Federated High 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 Federated High and Jpmorgan Smartretirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated High Yield and Jpmorgan Smartretirement 2030, you can compare the effects of market volatilities on Federated High 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 Federated High with a short position of Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated High and Jpmorgan Smartretirement.
Diversification Opportunities for Federated High and Jpmorgan Smartretirement
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federated and Jpmorgan is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Federated High Yield and Jpmorgan Smartretirement 2030 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement and Federated High 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 Federated High Yield 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 Federated High i.e., Federated High and Jpmorgan Smartretirement go up and down completely randomly.
Pair Corralation between Federated High and Jpmorgan Smartretirement
Assuming the 90 days horizon Federated High is expected to generate 1.18 times less return on investment than Jpmorgan Smartretirement. But when comparing it to its historical volatility, Federated High Yield is 2.06 times less risky than Jpmorgan Smartretirement. It trades about 0.26 of its potential returns per unit of risk. Jpmorgan Smartretirement 2030 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,831 in Jpmorgan Smartretirement 2030 on October 20, 2024 and sell it today you would earn a total of 27.00 from holding Jpmorgan Smartretirement 2030 or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated High Yield vs. Jpmorgan Smartretirement 2030
Performance |
| Timeline |
| Federated High Yield |
| Jpmorgan Smartretirement |
Federated High and Jpmorgan Smartretirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated High and Jpmorgan Smartretirement
The main advantage of trading using opposite Federated High and Jpmorgan Smartretirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated High 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.| Federated High vs. Locorr Dynamic Equity | Federated High vs. Smallcap World Fund | Federated High vs. Doubleline Core Fixed | Federated High vs. Old Westbury Fixed |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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