Correlation Between Jpmorgan and Massachusetts Investors
Can any of the company-specific risk be diversified away by investing in both Jpmorgan and Massachusetts Investors 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 and Massachusetts Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Equity Fund and Massachusetts Investors Trust, you can compare the effects of market volatilities on Jpmorgan and Massachusetts Investors 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 with a short position of Massachusetts Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan and Massachusetts Investors.
Diversification Opportunities for Jpmorgan and Massachusetts Investors
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jpmorgan and Massachusetts is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Fund and Massachusetts Investors Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massachusetts Investors and Jpmorgan 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 Equity Fund are associated (or correlated) with Massachusetts Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massachusetts Investors has no effect on the direction of Jpmorgan i.e., Jpmorgan and Massachusetts Investors go up and down completely randomly.
Pair Corralation between Jpmorgan and Massachusetts Investors
Assuming the 90 days horizon Jpmorgan Equity Fund is expected to generate 0.7 times more return on investment than Massachusetts Investors. However, Jpmorgan Equity Fund is 1.42 times less risky than Massachusetts Investors. It trades about -0.02 of its potential returns per unit of risk. Massachusetts Investors Trust is currently generating about -0.07 per unit of risk. If you would invest 2,644 in Jpmorgan Equity Fund on October 26, 2024 and sell it today you would lose (49.00) from holding Jpmorgan Equity Fund or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Equity Fund vs. Massachusetts Investors Trust
Performance |
| Timeline |
| Jpmorgan Equity |
| Massachusetts Investors |
Jpmorgan and Massachusetts Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan and Massachusetts Investors
The main advantage of trading using opposite Jpmorgan and Massachusetts Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan position performs unexpectedly, Massachusetts Investors 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 Massachusetts Investors will offset losses from the drop in Massachusetts Investors' long position.| Jpmorgan vs. Massachusetts Investors Trust | Jpmorgan vs. Jpmorgan Mid Cap | Jpmorgan vs. Jpmorgan Short Duration | Jpmorgan vs. Jpmorgan High Yield |
| Massachusetts Investors vs. Metropolitan West High | Massachusetts Investors vs. Prudential High Yield | Massachusetts Investors vs. Mesirow Financial High | Massachusetts Investors vs. Ab High Income |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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