Correlation Between Jpmorgan Trust and Franklin Government
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Trust and Franklin Government 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 Franklin Government 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 Franklin Government Money, you can compare the effects of market volatilities on Jpmorgan Trust and Franklin Government 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 Franklin Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Trust and Franklin Government.
Diversification Opportunities for Jpmorgan Trust and Franklin Government
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jpmorgan and Franklin is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Trust I and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money 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 Franklin Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Jpmorgan Trust i.e., Jpmorgan Trust and Franklin Government go up and down completely randomly.
Pair Corralation between Jpmorgan Trust and Franklin Government
Assuming the 90 days horizon Jpmorgan Trust I is expected to generate 155.24 times more return on investment than Franklin Government. However, Jpmorgan Trust is 155.24 times more volatile than Franklin Government Money. It trades about 0.04 of its potential returns per unit of risk. Franklin Government Money is currently generating about 0.13 per unit of risk. If you would invest 91.00 in Jpmorgan Trust I on September 3, 2024 and sell it today you would earn a total of 9.00 from holding Jpmorgan Trust I or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.63% |
| Values | Daily Returns |
Jpmorgan Trust I vs. Franklin Government Money
Performance |
| Timeline |
| Jpmorgan Trust I |
| Franklin Government Money |
Jpmorgan Trust and Franklin Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Trust and Franklin Government
The main advantage of trading using opposite Jpmorgan Trust and Franklin Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Trust position performs unexpectedly, Franklin Government 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 Franklin Government will offset losses from the drop in Franklin Government's long position.| Jpmorgan Trust vs. Small Midcap Dividend Income | Jpmorgan Trust vs. The Hartford Small | Jpmorgan Trust vs. Rbb Fund | Jpmorgan Trust vs. Qs Small Capitalization |
| Franklin Government vs. Vanguard Total Stock | Franklin Government vs. Vanguard 500 Index | Franklin Government vs. Vanguard Total Stock | Franklin Government vs. Vanguard Total Stock |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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