Correlation Between Jp Morgan and American Funds
Can any of the company-specific risk be diversified away by investing in both Jp Morgan and American Funds 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 American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jp Morgan Smartretirement and American Funds American, you can compare the effects of market volatilities on Jp Morgan and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jp Morgan and American Funds.
Diversification Opportunities for Jp Morgan and American Funds
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JTSQX and American is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jp Morgan Smartretirement and American Funds American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds American 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 Smartretirement are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds American has no effect on the direction of Jp Morgan i.e., Jp Morgan and American Funds go up and down completely randomly.
Pair Corralation between Jp Morgan and American Funds
Assuming the 90 days horizon Jp Morgan Smartretirement is expected to generate 1.14 times more return on investment than American Funds. However, Jp Morgan is 1.14 times more volatile than American Funds American. It trades about 0.08 of its potential returns per unit of risk. American Funds American is currently generating about 0.06 per unit of risk. If you would invest 1,759 in Jp Morgan Smartretirement on November 1, 2024 and sell it today you would earn a total of 559.00 from holding Jp Morgan Smartretirement or generate 31.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jp Morgan Smartretirement vs. American Funds American
Performance |
| Timeline |
| Jp Morgan Smartretirement |
| American Funds American |
Jp Morgan and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jp Morgan and American Funds
The main advantage of trading using opposite Jp Morgan and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jp Morgan position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Jp Morgan vs. Inverse Government Long | Jp Morgan vs. Transamerica Intermediate Muni | Jp Morgan vs. California Municipal Portfolio | Jp Morgan vs. Old Westbury Municipal |
| American Funds vs. Wealthbuilder Moderate Balanced | American Funds vs. Jp Morgan Smartretirement | American Funds vs. Wilmington Trust Retirement | American Funds vs. American Funds Retirement |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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