Correlation Between American Funds and Jpmorgan Short
Can any of the company-specific risk be diversified away by investing in both American Funds and Jpmorgan Short 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 Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Conservative and Jpmorgan Short Duration, you can compare the effects of market volatilities on American Funds and Jpmorgan Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Jpmorgan Short.
Diversification Opportunities for American Funds and Jpmorgan Short
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Jpmorgan is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Conservative and Jpmorgan Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Short Duration 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 Conservative are associated (or correlated) with Jpmorgan Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Short Duration has no effect on the direction of American Funds i.e., American Funds and Jpmorgan Short go up and down completely randomly.
Pair Corralation between American Funds and Jpmorgan Short
Assuming the 90 days horizon American Funds Conservative is expected to generate 3.09 times more return on investment than Jpmorgan Short. However, American Funds is 3.09 times more volatile than Jpmorgan Short Duration. It trades about 0.14 of its potential returns per unit of risk. Jpmorgan Short Duration is currently generating about 0.2 per unit of risk. If you would invest 1,217 in American Funds Conservative on September 12, 2024 and sell it today you would earn a total of 152.00 from holding American Funds Conservative or generate 12.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Conservative vs. Jpmorgan Short Duration
Performance |
| Timeline |
| American Funds Conse |
| Jpmorgan Short Duration |
American Funds and Jpmorgan Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Jpmorgan Short
The main advantage of trading using opposite American Funds and Jpmorgan Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Jpmorgan Short 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 Short will offset losses from the drop in Jpmorgan Short's long position.| American Funds vs. Sp Smallcap 600 | American Funds vs. Ab Small Cap | American Funds vs. Vy Columbia Small | American Funds vs. Guidemark Smallmid Cap |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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