Correlation Between Secured Options and Jpmorgan Hedged
Can any of the company-specific risk be diversified away by investing in both Secured Options and Jpmorgan Hedged 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 Secured Options and Jpmorgan Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Secured Options Portfolio and Jpmorgan Hedged Equity, you can compare the effects of market volatilities on Secured Options and Jpmorgan Hedged 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 Secured Options with a short position of Jpmorgan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secured Options and Jpmorgan Hedged.
Diversification Opportunities for Secured Options and Jpmorgan Hedged
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Secured and Jpmorgan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Secured Options Portfolio and Jpmorgan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Hedged Equity and Secured Options 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 Secured Options Portfolio are associated (or correlated) with Jpmorgan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Hedged Equity has no effect on the direction of Secured Options i.e., Secured Options and Jpmorgan Hedged go up and down completely randomly.
Pair Corralation between Secured Options and Jpmorgan Hedged
Assuming the 90 days horizon Secured Options Portfolio is expected to generate 0.61 times more return on investment than Jpmorgan Hedged. However, Secured Options Portfolio is 1.64 times less risky than Jpmorgan Hedged. It trades about 0.59 of its potential returns per unit of risk. Jpmorgan Hedged Equity is currently generating about 0.34 per unit of risk. If you would invest 1,513 in Secured Options Portfolio on September 1, 2024 and sell it today you would earn a total of 45.00 from holding Secured Options Portfolio or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Secured Options Portfolio vs. Jpmorgan Hedged Equity
Performance |
| Timeline |
| Secured Options Portfolio |
| Jpmorgan Hedged Equity |
Secured Options and Jpmorgan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Secured Options and Jpmorgan Hedged
The main advantage of trading using opposite Secured Options and Jpmorgan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Secured Options position performs unexpectedly, Jpmorgan Hedged 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 Hedged will offset losses from the drop in Jpmorgan Hedged's long position.| Secured Options vs. Small Cap Equity | Secured Options vs. Matthews Pacific Tiger | Secured Options vs. Large Cap E | Secured Options vs. Longshort Portfolio Longshort |
| Jpmorgan Hedged vs. Artisan Emerging Markets | Jpmorgan Hedged vs. Doubleline Emerging Markets | Jpmorgan Hedged vs. Growth Strategy Fund | Jpmorgan Hedged vs. Dws Emerging Markets |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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