Correlation Between Jpmorgan Trust and American High-income
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Trust and American High-income 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 Trust and American High-income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Trust I and American High Income Municipal, you can compare the effects of market volatilities on Jpmorgan Trust and American High-income 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 Trust with a short position of American High-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Trust and American High-income.
Diversification Opportunities for Jpmorgan Trust and American High-income
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jpmorgan and American is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Trust I and American High Income Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Income and Jpmorgan Trust 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 Trust I are associated (or correlated) with American High-income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American High Income has no effect on the direction of Jpmorgan Trust i.e., Jpmorgan Trust and American High-income go up and down completely randomly.
Pair Corralation between Jpmorgan Trust and American High-income
Assuming the 90 days horizon Jpmorgan Trust is expected to generate 2.67 times less return on investment than American High-income. In addition to that, Jpmorgan Trust is 1.54 times more volatile than American High Income Municipal. It trades about 0.04 of its total potential returns per unit of risk. American High Income Municipal is currently generating about 0.18 per unit of volatility. If you would invest 1,475 in American High Income Municipal on September 2, 2024 and sell it today you would earn a total of 82.00 from holding American High Income Municipal or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.92% |
| Values | Daily Returns |
Jpmorgan Trust I vs. American High Income Municipal
Performance |
| Timeline |
| Jpmorgan Trust I |
| American High Income |
Jpmorgan Trust and American High-income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Trust and American High-income
The main advantage of trading using opposite Jpmorgan Trust and American High-income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Trust position performs unexpectedly, American High-income 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 American High-income will offset losses from the drop in American High-income's long position.| Jpmorgan Trust vs. Vanguard Total Stock | Jpmorgan Trust vs. Vanguard 500 Index | Jpmorgan Trust vs. Vanguard Total Stock | Jpmorgan Trust vs. Vanguard Total Stock |
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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 Stocks Directory module to find actively traded stocks across global markets.
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