Correlation Between Federated Ultrashort and Jpmorgan Research
Can any of the company-specific risk be diversified away by investing in both Federated Ultrashort and Jpmorgan Research 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 Ultrashort and Jpmorgan Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Ultrashort Bond and Jpmorgan Research Market, you can compare the effects of market volatilities on Federated Ultrashort and Jpmorgan Research 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 Ultrashort with a short position of Jpmorgan Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ultrashort and Jpmorgan Research.
Diversification Opportunities for Federated Ultrashort and Jpmorgan Research
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FEDERATED and Jpmorgan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ultrashort Bond and Jpmorgan Research Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Research Market and Federated Ultrashort 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 Ultrashort Bond are associated (or correlated) with Jpmorgan Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Research Market has no effect on the direction of Federated Ultrashort i.e., Federated Ultrashort and Jpmorgan Research go up and down completely randomly.
Pair Corralation between Federated Ultrashort and Jpmorgan Research
Assuming the 90 days horizon Federated Ultrashort Bond is not expected to generate positive returns. However, Federated Ultrashort Bond is 3.61 times less risky than Jpmorgan Research. It waists most of its returns potential to compensate for thr risk taken. Jpmorgan Research is generating about 0.3 per unit of risk. If you would invest 1,501 in Jpmorgan Research Market on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Jpmorgan Research Market or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ultrashort Bond vs. Jpmorgan Research Market
Performance |
| Timeline |
| Federated Ultrashort Bond |
| Jpmorgan Research Market |
Federated Ultrashort and Jpmorgan Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ultrashort and Jpmorgan Research
The main advantage of trading using opposite Federated Ultrashort and Jpmorgan Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ultrashort position performs unexpectedly, Jpmorgan Research 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 Research will offset losses from the drop in Jpmorgan Research's long position.| Federated Ultrashort vs. Federated Emerging Market | Federated Ultrashort vs. Federated Mdt All | Federated Ultrashort vs. Federated Mdt Balanced | Federated Ultrashort vs. Federated Global Allocation |
| Jpmorgan Research vs. Ultra Short Fixed Income | Jpmorgan Research vs. Ab Select Longshort | Jpmorgan Research vs. Federated Ultrashort Bond | Jpmorgan Research vs. Vanguard Institutional Short Term |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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