Correlation Between JPMorgan Fundamental and Nuveen Sustainable

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Can any of the company-specific risk be diversified away by investing in both JPMorgan Fundamental and Nuveen Sustainable 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 Nuveen Sustainable 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 Nuveen Sustainable Core, you can compare the effects of market volatilities on JPMorgan Fundamental and Nuveen Sustainable 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 Nuveen Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Fundamental and Nuveen Sustainable.

Diversification Opportunities for JPMorgan Fundamental and Nuveen Sustainable

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between JPMorgan and Nuveen is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Fundamental Data and Nuveen Sustainable Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Sustainable Core 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 Nuveen Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Sustainable Core has no effect on the direction of JPMorgan Fundamental i.e., JPMorgan Fundamental and Nuveen Sustainable go up and down completely randomly.

Pair Corralation between JPMorgan Fundamental and Nuveen Sustainable

Given the investment horizon of 90 days JPMorgan Fundamental Data is expected to generate 1.33 times more return on investment than Nuveen Sustainable. However, JPMorgan Fundamental is 1.33 times more volatile than Nuveen Sustainable Core. It trades about 0.4 of its potential returns per unit of risk. Nuveen Sustainable Core is currently generating about 0.36 per unit of risk. If you would invest  5,549  in JPMorgan Fundamental Data on September 4, 2024 and sell it today you would earn a total of  445.00  from holding JPMorgan Fundamental Data or generate 8.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

JPMorgan Fundamental Data  vs.  Nuveen Sustainable Core

 Performance 
       Timeline  
JPMorgan Fundamental Data 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Fundamental Data are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, JPMorgan Fundamental may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Nuveen Sustainable Core 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Sustainable Core are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental indicators, Nuveen Sustainable may actually be approaching a critical reversion point that can send shares even higher in January 2025.

JPMorgan Fundamental and Nuveen Sustainable Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JPMorgan Fundamental and Nuveen Sustainable

The main advantage of trading using opposite JPMorgan Fundamental and Nuveen Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Fundamental position performs unexpectedly, Nuveen Sustainable 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 Nuveen Sustainable will offset losses from the drop in Nuveen Sustainable's long position.
The idea behind JPMorgan Fundamental Data and Nuveen Sustainable Core pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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