Correlation Between Jpmorgan Hedged and Swan Defined
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Hedged and Swan Defined 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 Swan Defined 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 Swan Defined Risk, you can compare the effects of market volatilities on Jpmorgan Hedged and Swan Defined 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 Swan Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Hedged and Swan Defined.
Diversification Opportunities for Jpmorgan Hedged and Swan Defined
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jpmorgan and Swan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Hedged Equity and Swan Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Defined Risk 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 Swan Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Defined Risk has no effect on the direction of Jpmorgan Hedged i.e., Jpmorgan Hedged and Swan Defined go up and down completely randomly.
Pair Corralation between Jpmorgan Hedged and Swan Defined
Assuming the 90 days horizon Jpmorgan Hedged is expected to generate 3.54 times less return on investment than Swan Defined. But when comparing it to its historical volatility, Jpmorgan Hedged Equity is 2.1 times less risky than Swan Defined. It trades about 0.13 of its potential returns per unit of risk. Swan Defined Risk is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,393 in Swan Defined Risk on August 27, 2024 and sell it today you would earn a total of 72.00 from holding Swan Defined Risk or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Hedged Equity vs. Swan Defined Risk
Performance |
| Timeline |
| Jpmorgan Hedged Equity |
| Swan Defined Risk |
Jpmorgan Hedged and Swan Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Hedged and Swan Defined
The main advantage of trading using opposite Jpmorgan Hedged and Swan Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Hedged position performs unexpectedly, Swan Defined 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 Swan Defined will offset losses from the drop in Swan Defined'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 |
| Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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