Correlation Between JPMorgan Fundamental and Avantis Small
Can any of the company-specific risk be diversified away by investing in both JPMorgan Fundamental and Avantis Small 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 Fundamental and Avantis Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Fundamental Data and Avantis Small Cap, you can compare the effects of market volatilities on JPMorgan Fundamental and Avantis Small 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 Fundamental with a short position of Avantis Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Fundamental and Avantis Small.
Diversification Opportunities for JPMorgan Fundamental and Avantis Small
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPMorgan and Avantis is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Fundamental Data and Avantis Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Small Cap and JPMorgan Fundamental 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 Fundamental Data are associated (or correlated) with Avantis Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Small Cap has no effect on the direction of JPMorgan Fundamental i.e., JPMorgan Fundamental and Avantis Small go up and down completely randomly.
Pair Corralation between JPMorgan Fundamental and Avantis Small
Given the investment horizon of 90 days JPMorgan Fundamental is expected to generate 2.09 times less return on investment than Avantis Small. But when comparing it to its historical volatility, JPMorgan Fundamental Data is 2.47 times less risky than Avantis Small. It trades about 0.33 of its potential returns per unit of risk. Avantis Small Cap is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 9,498 in Avantis Small Cap on September 3, 2024 and sell it today you would earn a total of 1,051 from holding Avantis Small Cap or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Fundamental Data vs. Avantis Small Cap
Performance |
| Timeline |
| JPMorgan Fundamental Data |
| Avantis Small Cap |
JPMorgan Fundamental and Avantis Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Fundamental and Avantis Small
The main advantage of trading using opposite JPMorgan Fundamental and Avantis Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Fundamental position performs unexpectedly, Avantis Small 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 Avantis Small will offset losses from the drop in Avantis Small's long position.| JPMorgan Fundamental vs. Sonida Senior Living | JPMorgan Fundamental vs. The9 Ltd ADR | JPMorgan Fundamental vs. VanEck Vectors ETF | JPMorgan Fundamental vs. Nine Energy Service |
| Avantis Small vs. FT Vest Equity | Avantis Small vs. Northern Lights | Avantis Small vs. Dimensional International High | Avantis Small vs. JPMorgan Fundamental Data |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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