Correlation Between Transamerica Funds and Jpmorgan Trust
Can any of the company-specific risk be diversified away by investing in both Transamerica Funds and Jpmorgan Trust 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 Transamerica Funds and Jpmorgan Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Funds and Jpmorgan Trust I, you can compare the effects of market volatilities on Transamerica Funds and Jpmorgan Trust 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 Transamerica Funds with a short position of Jpmorgan Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Funds and Jpmorgan Trust.
Diversification Opportunities for Transamerica Funds and Jpmorgan Trust
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Transamerica and Jpmorgan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Funds and Jpmorgan Trust I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Trust I and Transamerica 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 Transamerica Funds are associated (or correlated) with Jpmorgan Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Trust I has no effect on the direction of Transamerica Funds i.e., Transamerica Funds and Jpmorgan Trust go up and down completely randomly.
Pair Corralation between Transamerica Funds and Jpmorgan Trust
Assuming the 90 days horizon Transamerica Funds is expected to generate 1.01 times less return on investment than Jpmorgan Trust. But when comparing it to its historical volatility, Transamerica Funds is 2.96 times less risky than Jpmorgan Trust. It trades about 0.13 of its potential returns per unit of risk. Jpmorgan Trust I is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 98.00 in Jpmorgan Trust I on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Jpmorgan Trust I or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 96.92% |
| Values | Daily Returns |
Transamerica Funds vs. Jpmorgan Trust I
Performance |
| Timeline |
| Transamerica Funds |
| Jpmorgan Trust I |
Transamerica Funds and Jpmorgan Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Funds and Jpmorgan Trust
The main advantage of trading using opposite Transamerica Funds and Jpmorgan Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Funds position performs unexpectedly, Jpmorgan Trust 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 Trust will offset losses from the drop in Jpmorgan Trust's long position.| Transamerica Funds vs. Vanguard Total Stock | Transamerica Funds vs. Vanguard 500 Index | Transamerica Funds vs. Vanguard Total Stock | Transamerica Funds vs. Vanguard Total Stock |
| Jpmorgan Trust vs. Vanguard Total Stock | Jpmorgan Trust vs. Vanguard 500 Index | Jpmorgan Trust vs. Vanguard Total Stock | Jpmorgan Trust vs. Vanguard Total Stock |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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