Correlation Between JPMorgan International and JPMorgan Momentum
Can any of the company-specific risk be diversified away by investing in both JPMorgan International and JPMorgan Momentum 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 International and JPMorgan Momentum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan International Growth and JPMorgan Momentum Factor, you can compare the effects of market volatilities on JPMorgan International and JPMorgan Momentum 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 International with a short position of JPMorgan Momentum. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan International and JPMorgan Momentum.
Diversification Opportunities for JPMorgan International and JPMorgan Momentum
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JPMorgan and JPMorgan is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan International Growth and JPMorgan Momentum Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Momentum Factor and JPMorgan International 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 International Growth are associated (or correlated) with JPMorgan Momentum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Momentum Factor has no effect on the direction of JPMorgan International i.e., JPMorgan International and JPMorgan Momentum go up and down completely randomly.
Pair Corralation between JPMorgan International and JPMorgan Momentum
Considering the 90-day investment horizon JPMorgan International is expected to generate 1.55 times less return on investment than JPMorgan Momentum. But when comparing it to its historical volatility, JPMorgan International Growth is 1.09 times less risky than JPMorgan Momentum. It trades about 0.12 of its potential returns per unit of risk. JPMorgan Momentum Factor is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,955 in JPMorgan Momentum Factor on November 5, 2024 and sell it today you would earn a total of 189.00 from holding JPMorgan Momentum Factor or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
JPMorgan International Growth vs. JPMorgan Momentum Factor
Performance |
| Timeline |
| JPMorgan International |
| JPMorgan Momentum Factor |
JPMorgan International and JPMorgan Momentum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan International and JPMorgan Momentum
The main advantage of trading using opposite JPMorgan International and JPMorgan Momentum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan International position performs unexpectedly, JPMorgan Momentum 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 JPMorgan Momentum will offset losses from the drop in JPMorgan Momentum's long position.| JPMorgan International vs. American Century ETF | JPMorgan International vs. TrueShares Technology AI | JPMorgan International vs. JPMorgan Quality Factor | JPMorgan International vs. JPMorgan USD Emerging |
| JPMorgan Momentum vs. JPMorgan Quality Factor | JPMorgan Momentum vs. JPMorgan Value Factor | JPMorgan Momentum vs. JPMorgan Diversified Return | JPMorgan Momentum vs. JPMorgan Diversified Return |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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