Correlation Between Jpmorgan Smartretirement and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Smartretirement and Federated Kaufmann 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 Smartretirement and Federated Kaufmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Smartretirement 2060 and Federated Kaufmann Large, you can compare the effects of market volatilities on Jpmorgan Smartretirement and Federated Kaufmann 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 Smartretirement with a short position of Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement and Federated Kaufmann.
Diversification Opportunities for Jpmorgan Smartretirement and Federated Kaufmann
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jpmorgan and FEDERATED is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement 2060 and Federated Kaufmann Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Large and Jpmorgan Smartretirement 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 Smartretirement 2060 are associated (or correlated) with Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Large has no effect on the direction of Jpmorgan Smartretirement i.e., Jpmorgan Smartretirement and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Jpmorgan Smartretirement and Federated Kaufmann
Assuming the 90 days horizon Jpmorgan Smartretirement is expected to generate 2.81 times less return on investment than Federated Kaufmann. But when comparing it to its historical volatility, Jpmorgan Smartretirement 2060 is 1.6 times less risky than Federated Kaufmann. It trades about 0.12 of its potential returns per unit of risk. Federated Kaufmann Large is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,901 in Federated Kaufmann Large on August 31, 2024 and sell it today you would earn a total of 86.00 from holding Federated Kaufmann Large or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Smartretirement 2060 vs. Federated Kaufmann Large
Performance |
| Timeline |
| Jpmorgan Smartretirement |
| Federated Kaufmann Large |
Jpmorgan Smartretirement and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Smartretirement and Federated Kaufmann
The main advantage of trading using opposite Jpmorgan Smartretirement and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Smartretirement position performs unexpectedly, Federated Kaufmann 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 Federated Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Jpmorgan Smartretirement vs. Federated Kaufmann Large | Jpmorgan Smartretirement vs. Tax Managed Large Cap | Jpmorgan Smartretirement vs. Touchstone Large Cap | Jpmorgan Smartretirement vs. Old Westbury Large |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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