Correlation Between Jpmorgan Strategic and Arbitrage Credit
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Strategic and Arbitrage Credit 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 Strategic and Arbitrage Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Strategic Income and The Arbitrage Credit, you can compare the effects of market volatilities on Jpmorgan Strategic and Arbitrage Credit 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 Strategic with a short position of Arbitrage Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Strategic and Arbitrage Credit.
Diversification Opportunities for Jpmorgan Strategic and Arbitrage Credit
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jpmorgan and Arbitrage is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Strategic Income and The Arbitrage Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Credit and Jpmorgan Strategic 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 Strategic Income are associated (or correlated) with Arbitrage Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Credit has no effect on the direction of Jpmorgan Strategic i.e., Jpmorgan Strategic and Arbitrage Credit go up and down completely randomly.
Pair Corralation between Jpmorgan Strategic and Arbitrage Credit
Assuming the 90 days horizon Jpmorgan Strategic is expected to generate 1.09 times less return on investment than Arbitrage Credit. But when comparing it to its historical volatility, Jpmorgan Strategic Income is 1.68 times less risky than Arbitrage Credit. It trades about 0.28 of its potential returns per unit of risk. The Arbitrage Credit is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 941.00 in The Arbitrage Credit on August 29, 2024 and sell it today you would earn a total of 39.00 from holding The Arbitrage Credit or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.52% |
| Values | Daily Returns |
Jpmorgan Strategic Income vs. The Arbitrage Credit
Performance |
| Timeline |
| Jpmorgan Strategic Income |
| Arbitrage Credit |
Jpmorgan Strategic and Arbitrage Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Strategic and Arbitrage Credit
The main advantage of trading using opposite Jpmorgan Strategic and Arbitrage Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Strategic position performs unexpectedly, Arbitrage Credit 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 Arbitrage Credit will offset losses from the drop in Arbitrage Credit's long position.| Jpmorgan Strategic vs. Baird Smallmid Cap | Jpmorgan Strategic vs. Vanguard Strategic Small Cap | Jpmorgan Strategic vs. Small Midcap Dividend Income | Jpmorgan Strategic vs. Touchstone Small Cap |
| Arbitrage Credit vs. The Arbitrage Fund | Arbitrage Credit vs. The Arbitrage Event Driven | Arbitrage Credit vs. The Arbitrage Fund | Arbitrage Credit vs. The Arbitrage Event Driven |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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