Correlation Between Jpmorgan Smartretirement* and Multisector Bond
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Smartretirement* and Multisector Bond 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 Multisector Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Smartretirement Blend and Multisector Bond Sma, you can compare the effects of market volatilities on Jpmorgan Smartretirement* and Multisector Bond 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 Multisector Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement* and Multisector Bond.
Diversification Opportunities for Jpmorgan Smartretirement* and Multisector Bond
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jpmorgan and Multisector is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement Blend and Multisector Bond Sma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multisector Bond Sma 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 Blend are associated (or correlated) with Multisector Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multisector Bond Sma has no effect on the direction of Jpmorgan Smartretirement* i.e., Jpmorgan Smartretirement* and Multisector Bond go up and down completely randomly.
Pair Corralation between Jpmorgan Smartretirement* and Multisector Bond
Assuming the 90 days horizon Jpmorgan Smartretirement Blend is expected to generate 1.26 times more return on investment than Multisector Bond. However, Jpmorgan Smartretirement* is 1.26 times more volatile than Multisector Bond Sma. It trades about 0.33 of its potential returns per unit of risk. Multisector Bond Sma is currently generating about 0.4 per unit of risk. If you would invest 2,378 in Jpmorgan Smartretirement Blend on September 4, 2024 and sell it today you would earn a total of 58.00 from holding Jpmorgan Smartretirement Blend or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Jpmorgan Smartretirement Blend vs. Multisector Bond Sma
Performance |
| Timeline |
| Jpmorgan Smartretirement* |
| Multisector Bond Sma |
Jpmorgan Smartretirement* and Multisector Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Smartretirement* and Multisector Bond
The main advantage of trading using opposite Jpmorgan Smartretirement* and Multisector Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Smartretirement* position performs unexpectedly, Multisector Bond 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 Multisector Bond will offset losses from the drop in Multisector Bond's long position.The idea behind Jpmorgan Smartretirement Blend and Multisector Bond Sma 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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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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