Correlation Between Jpmorgan Smartretirement* and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Smartretirement* and Loomis Sayles 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 Loomis Sayles 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 Loomis Sayles Growth, you can compare the effects of market volatilities on Jpmorgan Smartretirement* and Loomis Sayles 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 Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement* and Loomis Sayles.
Diversification Opportunities for Jpmorgan Smartretirement* and Loomis Sayles
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jpmorgan and Loomis is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement Blend and Loomis Sayles Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Growth 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 Loomis Sayles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loomis Sayles Growth has no effect on the direction of Jpmorgan Smartretirement* i.e., Jpmorgan Smartretirement* and Loomis Sayles go up and down completely randomly.
Pair Corralation between Jpmorgan Smartretirement* and Loomis Sayles
Assuming the 90 days horizon Jpmorgan Smartretirement* is expected to generate 2.59 times less return on investment than Loomis Sayles. But when comparing it to its historical volatility, Jpmorgan Smartretirement Blend is 2.21 times less risky than Loomis Sayles. It trades about 0.08 of its potential returns per unit of risk. Loomis Sayles Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,908 in Loomis Sayles Growth on October 25, 2024 and sell it today you would earn a total of 1,192 from holding Loomis Sayles Growth or generate 62.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Jpmorgan Smartretirement Blend vs. Loomis Sayles Growth
Performance |
| Timeline |
| Jpmorgan Smartretirement* |
| Loomis Sayles Growth |
Jpmorgan Smartretirement* and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Smartretirement* and Loomis Sayles
The main advantage of trading using opposite Jpmorgan Smartretirement* and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Smartretirement* position performs unexpectedly, Loomis Sayles 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 Loomis Sayles will offset losses from the drop in Loomis Sayles' long position.The idea behind Jpmorgan Smartretirement Blend and Loomis Sayles Growth 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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