Correlation Between Jpmorgan Government and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Government and Templeton Growth 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 Government and Templeton Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Government Bond and Templeton Growth Fund, you can compare the effects of market volatilities on Jpmorgan Government and Templeton Growth 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 Government with a short position of Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Government and Templeton Growth.
Diversification Opportunities for Jpmorgan Government and Templeton Growth
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jpmorgan and Templeton is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Government Bond and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth and Jpmorgan Government 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 Government Bond are associated (or correlated) with Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Jpmorgan Government i.e., Jpmorgan Government and Templeton Growth go up and down completely randomly.
Pair Corralation between Jpmorgan Government and Templeton Growth
Assuming the 90 days horizon Jpmorgan Government is expected to generate 4.92 times less return on investment than Templeton Growth. But when comparing it to its historical volatility, Jpmorgan Government Bond is 2.46 times less risky than Templeton Growth. It trades about 0.07 of its potential returns per unit of risk. Templeton Growth Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,606 in Templeton Growth Fund on October 22, 2024 and sell it today you would earn a total of 41.00 from holding Templeton Growth Fund or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Government Bond vs. Templeton Growth Fund
Performance |
| Timeline |
| Jpmorgan Government Bond |
| Templeton Growth |
Jpmorgan Government and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Government and Templeton Growth
The main advantage of trading using opposite Jpmorgan Government and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Government position performs unexpectedly, Templeton Growth 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 Templeton Growth will offset losses from the drop in Templeton Growth's long position.| Jpmorgan Government vs. Lord Abbett Diversified | Jpmorgan Government vs. Victory Incore Fund | Jpmorgan Government vs. Nasdaq 100 Profund Nasdaq 100 | Jpmorgan Government vs. Growth Fund Of |
| Templeton Growth vs. Vy Columbia Small | Templeton Growth vs. Ab Small Cap | Templeton Growth vs. Qs Defensive Growth | Templeton Growth vs. Rational Defensive Growth |
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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