Correlation Between Jpmorgan Value and Jpmorgan Growth
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Value and Jpmorgan Growth 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 Value and Jpmorgan Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Value Advantage and Jpmorgan Growth Advantage, you can compare the effects of market volatilities on Jpmorgan Value and Jpmorgan Growth 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 Value with a short position of Jpmorgan Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Value and Jpmorgan Growth.
Diversification Opportunities for Jpmorgan Value and Jpmorgan Growth
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jpmorgan and Jpmorgan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Value Advantage and Jpmorgan Growth Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Growth Advantage and Jpmorgan Value 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 Value Advantage are associated (or correlated) with Jpmorgan Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Growth Advantage has no effect on the direction of Jpmorgan Value i.e., Jpmorgan Value and Jpmorgan Growth go up and down completely randomly.
Pair Corralation between Jpmorgan Value and Jpmorgan Growth
Assuming the 90 days horizon Jpmorgan Value is expected to generate 3.28 times less return on investment than Jpmorgan Growth. But when comparing it to its historical volatility, Jpmorgan Value Advantage is 1.29 times less risky than Jpmorgan Growth. It trades about 0.04 of its potential returns per unit of risk. Jpmorgan Growth Advantage is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,860 in Jpmorgan Growth Advantage on August 26, 2024 and sell it today you would earn a total of 1,291 from holding Jpmorgan Growth Advantage or generate 69.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Value Advantage vs. Jpmorgan Growth Advantage
Performance |
| Timeline |
| Jpmorgan Value Advantage |
| Jpmorgan Growth Advantage |
Jpmorgan Value and Jpmorgan Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Value and Jpmorgan Growth
The main advantage of trading using opposite Jpmorgan Value and Jpmorgan Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Value position performs unexpectedly, Jpmorgan Growth 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 Jpmorgan Growth will offset losses from the drop in Jpmorgan Growth's long position.| Jpmorgan Value vs. Jpmorgan Growth Advantage | Jpmorgan Value vs. Jpmorgan Equity Income | Jpmorgan Value vs. Jpmorgan Equity Fund | Jpmorgan Value vs. Jpmorgan Value Advantage |
| Jpmorgan Growth vs. Jpmorgan Value Advantage | Jpmorgan Growth vs. Jpmorgan Equity Income | Jpmorgan Growth vs. Jpmorgan Large Cap | Jpmorgan Growth vs. Jpmorgan Equity Fund |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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