Correlation Between American Funds and Jpmorgan Emerging
Can any of the company-specific risk be diversified away by investing in both American Funds and Jpmorgan Emerging 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 Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds New and Jpmorgan Emerging Markets, you can compare the effects of market volatilities on American Funds and Jpmorgan Emerging 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 Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Jpmorgan Emerging.
Diversification Opportunities for American Funds and Jpmorgan Emerging
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Jpmorgan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding American Funds New and Jpmorgan Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Emerging Markets 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 New are associated (or correlated) with Jpmorgan Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Emerging Markets has no effect on the direction of American Funds i.e., American Funds and Jpmorgan Emerging go up and down completely randomly.
Pair Corralation between American Funds and Jpmorgan Emerging
Assuming the 90 days horizon American Funds is expected to generate 1.37 times less return on investment than Jpmorgan Emerging. But when comparing it to its historical volatility, American Funds New is 1.45 times less risky than Jpmorgan Emerging. It trades about 0.05 of its potential returns per unit of risk. Jpmorgan Emerging Markets is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,659 in Jpmorgan Emerging Markets on September 12, 2024 and sell it today you would earn a total of 41.00 from holding Jpmorgan Emerging Markets or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
American Funds New vs. Jpmorgan Emerging Markets
Performance |
| Timeline |
| American Funds New |
| Jpmorgan Emerging Markets |
American Funds and Jpmorgan Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Jpmorgan Emerging
The main advantage of trading using opposite American Funds and Jpmorgan Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Jpmorgan Emerging 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 Emerging will offset losses from the drop in Jpmorgan Emerging's long position.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| Jpmorgan Emerging vs. Barings Global Floating | Jpmorgan Emerging vs. Commonwealth Global Fund | Jpmorgan Emerging vs. Artisan Global Unconstrained | Jpmorgan Emerging vs. Mirova Global Green |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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