Correlation Between JP Morgan and Capital Group
Can any of the company-specific risk be diversified away by investing in both JP Morgan and Capital Group 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 JP Morgan and Capital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JP Morgan Exchange Traded and Capital Group Multi Sector, you can compare the effects of market volatilities on JP Morgan and Capital Group 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 JP Morgan with a short position of Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of JP Morgan and Capital Group.
Diversification Opportunities for JP Morgan and Capital Group
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPIE and Capital is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Exchange Traded and Capital Group Multi Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Multi and JP Morgan 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 JP Morgan Exchange Traded are associated (or correlated) with Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Multi has no effect on the direction of JP Morgan i.e., JP Morgan and Capital Group go up and down completely randomly.
Pair Corralation between JP Morgan and Capital Group
Given the investment horizon of 90 days JP Morgan is expected to generate 2.43 times less return on investment than Capital Group. But when comparing it to its historical volatility, JP Morgan Exchange Traded is 3.79 times less risky than Capital Group. It trades about 0.16 of its potential returns per unit of risk. Capital Group Multi Sector is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,738 in Capital Group Multi Sector on August 28, 2024 and sell it today you would earn a total of 23.00 from holding Capital Group Multi Sector or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JP Morgan Exchange Traded vs. Capital Group Multi Sector
Performance |
| Timeline |
| JP Morgan Exchange |
| Capital Group Multi |
JP Morgan and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JP Morgan and Capital Group
The main advantage of trading using opposite JP Morgan and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JP Morgan position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group's long position.| JP Morgan vs. JPMorgan Core Plus | JP Morgan vs. JPMorgan International Bond | JP Morgan vs. JPMorgan Ultra Short Income | JP Morgan vs. JPMorgan Short Duration |
| Capital Group vs. Capital Group Short | Capital Group vs. Capital Group Municipal | Capital Group vs. Capital Group Global | Capital Group vs. Capital Group Dividend |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |