Correlation Between Jpmorgan Small and Fidelity Contrafund
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Small and Fidelity Contrafund 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 Small and Fidelity Contrafund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Small Cap and Fidelity Trafund Class, you can compare the effects of market volatilities on Jpmorgan Small and Fidelity Contrafund 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 Small with a short position of Fidelity Contrafund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Small and Fidelity Contrafund.
Diversification Opportunities for Jpmorgan Small and Fidelity Contrafund
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jpmorgan and FIDELITY is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Small Cap and Fidelity Trafund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Trafund Class and Jpmorgan Small 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 Small Cap are associated (or correlated) with Fidelity Contrafund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Trafund Class has no effect on the direction of Jpmorgan Small i.e., Jpmorgan Small and Fidelity Contrafund go up and down completely randomly.
Pair Corralation between Jpmorgan Small and Fidelity Contrafund
Assuming the 90 days horizon Jpmorgan Small Cap is expected to generate 1.69 times more return on investment than Fidelity Contrafund. However, Jpmorgan Small is 1.69 times more volatile than Fidelity Trafund Class. It trades about 0.29 of its potential returns per unit of risk. Fidelity Trafund Class is currently generating about 0.28 per unit of risk. If you would invest 2,191 in Jpmorgan Small Cap on September 3, 2024 and sell it today you would earn a total of 196.00 from holding Jpmorgan Small Cap or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Small Cap vs. Fidelity Trafund Class
Performance |
| Timeline |
| Jpmorgan Small Cap |
| Fidelity Trafund Class |
Jpmorgan Small and Fidelity Contrafund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Small and Fidelity Contrafund
The main advantage of trading using opposite Jpmorgan Small and Fidelity Contrafund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Small position performs unexpectedly, Fidelity Contrafund 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 Fidelity Contrafund will offset losses from the drop in Fidelity Contrafund's long position.| Jpmorgan Small vs. James Balanced Golden | Jpmorgan Small vs. Global Gold Fund | Jpmorgan Small vs. Goldman Sachs Short | Jpmorgan Small vs. Oppenheimer Gold Special |
| Fidelity Contrafund vs. Boston Partners Small | Fidelity Contrafund vs. Heartland Value Plus | Fidelity Contrafund vs. Ultrasmall Cap Profund Ultrasmall Cap | Fidelity Contrafund vs. Columbia Small Cap |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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