Correlation Between Jpmorgan Hedged and Meridian Equity
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Hedged and Meridian Equity 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 Hedged and Meridian Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Hedged Equity and Meridian Equity Income, you can compare the effects of market volatilities on Jpmorgan Hedged and Meridian Equity 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 Hedged with a short position of Meridian Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Hedged and Meridian Equity.
Diversification Opportunities for Jpmorgan Hedged and Meridian Equity
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jpmorgan and Meridian is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Hedged Equity and Meridian Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Equity Income and Jpmorgan Hedged 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 Hedged Equity are associated (or correlated) with Meridian Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Equity Income has no effect on the direction of Jpmorgan Hedged i.e., Jpmorgan Hedged and Meridian Equity go up and down completely randomly.
Pair Corralation between Jpmorgan Hedged and Meridian Equity
Assuming the 90 days horizon Jpmorgan Hedged is expected to generate 1.01 times less return on investment than Meridian Equity. But when comparing it to its historical volatility, Jpmorgan Hedged Equity is 1.47 times less risky than Meridian Equity. It trades about 0.14 of its potential returns per unit of risk. Meridian Equity Income is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,178 in Meridian Equity Income on August 26, 2024 and sell it today you would earn a total of 235.00 from holding Meridian Equity Income or generate 19.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Hedged Equity vs. Meridian Equity Income
Performance |
| Timeline |
| Jpmorgan Hedged Equity |
| Meridian Equity Income |
Jpmorgan Hedged and Meridian Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Hedged and Meridian Equity
The main advantage of trading using opposite Jpmorgan Hedged and Meridian Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Hedged position performs unexpectedly, Meridian Equity 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 Meridian Equity will offset losses from the drop in Meridian Equity's long position.| Jpmorgan Hedged vs. Fidelity Sai Emerging | Jpmorgan Hedged vs. Fidelity Sai International | Jpmorgan Hedged vs. Aa Pimco Tr | Jpmorgan Hedged vs. Fidelity Sai Minimum |
| Meridian Equity vs. Meridian Equity Income | Meridian Equity vs. Meridian Growth Fund | Meridian Equity vs. Meridian Growth Fund | Meridian Equity vs. Meridian Equity Income |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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