Correlation Between Jpmorgan Hedged and Salient Tactical
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Hedged and Salient Tactical 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 Salient Tactical 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 Salient Tactical Plus, you can compare the effects of market volatilities on Jpmorgan Hedged and Salient Tactical 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 Salient Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Hedged and Salient Tactical.
Diversification Opportunities for Jpmorgan Hedged and Salient Tactical
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jpmorgan and SALIENT is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Hedged Equity and Salient Tactical Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Tactical Plus 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 Salient Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Tactical Plus has no effect on the direction of Jpmorgan Hedged i.e., Jpmorgan Hedged and Salient Tactical go up and down completely randomly.
Pair Corralation between Jpmorgan Hedged and Salient Tactical
Assuming the 90 days horizon Jpmorgan Hedged Equity is expected to generate 1.25 times more return on investment than Salient Tactical. However, Jpmorgan Hedged is 1.25 times more volatile than Salient Tactical Plus. It trades about 0.14 of its potential returns per unit of risk. Salient Tactical Plus is currently generating about 0.04 per unit of risk. If you would invest 2,942 in Jpmorgan Hedged Equity on September 1, 2024 and sell it today you would earn a total of 437.00 from holding Jpmorgan Hedged Equity or generate 14.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Jpmorgan Hedged Equity vs. Salient Tactical Plus
Performance |
| Timeline |
| Jpmorgan Hedged Equity |
| Salient Tactical Plus |
Jpmorgan Hedged and Salient Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Hedged and Salient Tactical
The main advantage of trading using opposite Jpmorgan Hedged and Salient Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Hedged position performs unexpectedly, Salient Tactical 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 Salient Tactical will offset losses from the drop in Salient Tactical's long position.| Jpmorgan Hedged vs. Jpmorgan Equity Income | Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Calamos Market Neutral | Jpmorgan Hedged vs. Jpmorgan Hedged Equity |
| Salient Tactical vs. Salient Tactical Plus | Salient Tactical vs. Salient Tactical Growth | Salient Tactical vs. Salient Tactical Growth | Salient Tactical vs. Salient Tactical 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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