Correlation Between Jpmorgan High and American Funds
Can any of the company-specific risk be diversified away by investing in both Jpmorgan High 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 Jpmorgan High and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan High Yield and American Funds 2020, you can compare the effects of market volatilities on Jpmorgan High 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 Jpmorgan High with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan High and American Funds.
Diversification Opportunities for Jpmorgan High and American Funds
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jpmorgan and American is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan High Yield and American Funds 2020 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2020 and Jpmorgan High 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 High Yield 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 2020 has no effect on the direction of Jpmorgan High i.e., Jpmorgan High and American Funds go up and down completely randomly.
Pair Corralation between Jpmorgan High and American Funds
Assuming the 90 days horizon Jpmorgan High is expected to generate 3.28 times less return on investment than American Funds. But when comparing it to its historical volatility, Jpmorgan High Yield is 1.38 times less risky than American Funds. It trades about 0.12 of its potential returns per unit of risk. American Funds 2020 is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,395 in American Funds 2020 on September 16, 2024 and sell it today you would earn a total of 21.00 from holding American Funds 2020 or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan High Yield vs. American Funds 2020
Performance |
| Timeline |
| Jpmorgan High Yield |
| American Funds 2020 |
Jpmorgan High and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan High and American Funds
The main advantage of trading using opposite Jpmorgan High and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan High 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.| Jpmorgan High vs. Rational Strategic Allocation | Jpmorgan High vs. Washington Mutual Investors | Jpmorgan High vs. Guidemark Large Cap | Jpmorgan High vs. Upright Assets Allocation |
| American Funds vs. Jpmorgan High Yield | American Funds vs. Virtus High Yield | American Funds vs. Siit High Yield | American Funds vs. Strategic Advisers Income |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |