Correlation Between JPMorgan Fundamental and Innovator Small
Can any of the company-specific risk be diversified away by investing in both JPMorgan Fundamental and Innovator 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 Innovator 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 Innovator Small Cap, you can compare the effects of market volatilities on JPMorgan Fundamental and Innovator 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 Innovator Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Fundamental and Innovator Small.
Diversification Opportunities for JPMorgan Fundamental and Innovator Small
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and Innovator is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Fundamental Data and Innovator Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator 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 Innovator Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Small Cap has no effect on the direction of JPMorgan Fundamental i.e., JPMorgan Fundamental and Innovator Small go up and down completely randomly.
Pair Corralation between JPMorgan Fundamental and Innovator Small
Given the investment horizon of 90 days JPMorgan Fundamental Data is expected to generate 1.29 times more return on investment than Innovator Small. However, JPMorgan Fundamental is 1.29 times more volatile than Innovator Small Cap. It trades about 0.05 of its potential returns per unit of risk. Innovator Small Cap is currently generating about 0.01 per unit of risk. If you would invest 5,275 in JPMorgan Fundamental Data on December 4, 2024 and sell it today you would earn a total of 234.00 from holding JPMorgan Fundamental Data or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Fundamental Data vs. Innovator Small Cap
Performance |
| Timeline |
| JPMorgan Fundamental Data |
| Innovator Small Cap |
JPMorgan Fundamental and Innovator Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Fundamental and Innovator Small
The main advantage of trading using opposite JPMorgan Fundamental and Innovator Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Fundamental position performs unexpectedly, Innovator 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 Innovator Small will offset losses from the drop in Innovator Small's long position.| JPMorgan Fundamental vs. Matthews China Discovery | JPMorgan Fundamental vs. Vanguard Mid Cap Index | JPMorgan Fundamental vs. SPDR SP 400 | JPMorgan Fundamental vs. SPDR SP 400 |
| Innovator Small vs. Dimensional ETF Trust | Innovator Small vs. Vanguard Small Cap Index | Innovator Small vs. First Trust Multi Manager | Innovator Small vs. Vanguard SP Small Cap |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |