Correlation Between Jpmorgan Smartretirement* and Vela Large
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Smartretirement* and Vela Large 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 Smartretirement* and Vela Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Smartretirement Blend and Vela Large Cap, you can compare the effects of market volatilities on Jpmorgan Smartretirement* and Vela Large 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 Smartretirement* with a short position of Vela Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement* and Vela Large.
Diversification Opportunities for Jpmorgan Smartretirement* and Vela Large
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jpmorgan and VELA is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement Blend and Vela Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vela Large Cap and Jpmorgan Smartretirement* 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 Smartretirement Blend are associated (or correlated) with Vela Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vela Large Cap has no effect on the direction of Jpmorgan Smartretirement* i.e., Jpmorgan Smartretirement* and Vela Large go up and down completely randomly.
Pair Corralation between Jpmorgan Smartretirement* and Vela Large
Assuming the 90 days horizon Jpmorgan Smartretirement* is expected to generate 1.02 times less return on investment than Vela Large. In addition to that, Jpmorgan Smartretirement* is 1.01 times more volatile than Vela Large Cap. It trades about 0.09 of its total potential returns per unit of risk. Vela Large Cap is currently generating about 0.09 per unit of volatility. If you would invest 1,387 in Vela Large Cap on September 3, 2024 and sell it today you would earn a total of 432.00 from holding Vela Large Cap or generate 31.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Smartretirement Blend vs. Vela Large Cap
Performance |
| Timeline |
| Jpmorgan Smartretirement* |
| Vela Large Cap |
Jpmorgan Smartretirement* and Vela Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Smartretirement* and Vela Large
The main advantage of trading using opposite Jpmorgan Smartretirement* and Vela Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Smartretirement* position performs unexpectedly, Vela Large 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 Vela Large will offset losses from the drop in Vela Large's long position.The idea behind Jpmorgan Smartretirement Blend and Vela Large Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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