Correlation Between Jpmorgan Hedged and James Alpha
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Hedged and James Alpha 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 James Alpha 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 James Alpha Managed, you can compare the effects of market volatilities on Jpmorgan Hedged and James Alpha 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 James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Hedged and James Alpha.
Diversification Opportunities for Jpmorgan Hedged and James Alpha
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Jpmorgan and James is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Hedged Equity and James Alpha Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Alpha Managed 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 James Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Alpha Managed has no effect on the direction of Jpmorgan Hedged i.e., Jpmorgan Hedged and James Alpha go up and down completely randomly.
Pair Corralation between Jpmorgan Hedged and James Alpha
Assuming the 90 days horizon Jpmorgan Hedged Equity is expected to under-perform the James Alpha. In addition to that, Jpmorgan Hedged is 1.22 times more volatile than James Alpha Managed. It trades about -0.09 of its total potential returns per unit of risk. James Alpha Managed is currently generating about -0.08 per unit of volatility. If you would invest 1,287 in James Alpha Managed on October 9, 2024 and sell it today you would lose (12.00) from holding James Alpha Managed or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Hedged Equity vs. James Alpha Managed
Performance |
| Timeline |
| Jpmorgan Hedged Equity |
| James Alpha Managed |
Jpmorgan Hedged and James Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Hedged and James Alpha
The main advantage of trading using opposite Jpmorgan Hedged and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Hedged position performs unexpectedly, James Alpha 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 James Alpha will offset losses from the drop in James Alpha's long position.| Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Loomis Sayles Global |
| James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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