Correlation Between Jpmorgan Short and Aqr Large

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Can any of the company-specific risk be diversified away by investing in both Jpmorgan Short and Aqr Large 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 Short and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Short Duration and Aqr Large Cap, you can compare the effects of market volatilities on Jpmorgan Short and Aqr Large 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 Short with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Short and Aqr Large.

Diversification Opportunities for Jpmorgan Short and Aqr Large

-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between Jpmorgan and Aqr is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Short Duration and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap and Jpmorgan Short 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 Short Duration are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Jpmorgan Short i.e., Jpmorgan Short and Aqr Large go up and down completely randomly.

Pair Corralation between Jpmorgan Short and Aqr Large

Assuming the 90 days horizon Jpmorgan Short Duration is expected to under-perform the Aqr Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jpmorgan Short Duration is 9.92 times less risky than Aqr Large. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Aqr Large Cap is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  2,453  in Aqr Large Cap on August 30, 2024 and sell it today you would earn a total of  113.00  from holding Aqr Large Cap or generate 4.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jpmorgan Short Duration  vs.  Aqr Large Cap

 Performance 
       Timeline  
Jpmorgan Short Duration 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Short Duration are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Aqr Large Cap 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Large Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr Large may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Jpmorgan Short and Aqr Large Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jpmorgan Short and Aqr Large

The main advantage of trading using opposite Jpmorgan Short and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Short position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.
The idea behind Jpmorgan Short Duration and Aqr Large Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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