Correlation Between Jpmorgan Equity and Secured Options
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Equity and Secured Options 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 Jpmorgan Equity and Secured Options into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Equity Income and Secured Options Portfolio, you can compare the effects of market volatilities on Jpmorgan Equity and Secured Options 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 Jpmorgan Equity with a short position of Secured Options. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Equity and Secured Options.
Diversification Opportunities for Jpmorgan Equity and Secured Options
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jpmorgan and Secured is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Income and Secured Options Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secured Options Portfolio and Jpmorgan Equity 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 Jpmorgan Equity Income are associated (or correlated) with Secured Options. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secured Options Portfolio has no effect on the direction of Jpmorgan Equity i.e., Jpmorgan Equity and Secured Options go up and down completely randomly.
Pair Corralation between Jpmorgan Equity and Secured Options
Assuming the 90 days horizon Jpmorgan Equity Income is expected to generate 3.52 times more return on investment than Secured Options. However, Jpmorgan Equity is 3.52 times more volatile than Secured Options Portfolio. It trades about 0.38 of its potential returns per unit of risk. Secured Options Portfolio is currently generating about 0.59 per unit of risk. If you would invest 2,589 in Jpmorgan Equity Income on September 4, 2024 and sell it today you would earn a total of 163.00 from holding Jpmorgan Equity Income or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Equity Income vs. Secured Options Portfolio
Performance |
| Timeline |
| Jpmorgan Equity Income |
| Secured Options Portfolio |
Jpmorgan Equity and Secured Options Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Equity and Secured Options
The main advantage of trading using opposite Jpmorgan Equity and Secured Options positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Equity position performs unexpectedly, Secured Options 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 Secured Options will offset losses from the drop in Secured Options' long position.| Jpmorgan Equity vs. Jpmorgan Large Cap | Jpmorgan Equity vs. Jpmorgan Growth Advantage | Jpmorgan Equity vs. Mfs International Diversification | Jpmorgan Equity vs. Jpmorgan Hedged Equity |
| Secured Options vs. Massmutual Select Diversified | Secured Options vs. Rbc Emerging Markets | Secured Options vs. Western Assets Emerging | Secured Options vs. Transamerica 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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