Correlation Between JPMorgan Fundamental and Litman Gregory
Can any of the company-specific risk be diversified away by investing in both JPMorgan Fundamental and Litman Gregory 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 Litman Gregory 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 Litman Gregory Funds, you can compare the effects of market volatilities on JPMorgan Fundamental and Litman Gregory 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 Litman Gregory. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Fundamental and Litman Gregory.
Diversification Opportunities for JPMorgan Fundamental and Litman Gregory
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JPMorgan and Litman is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Fundamental Data and Litman Gregory Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litman Gregory Funds 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 Litman Gregory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litman Gregory Funds has no effect on the direction of JPMorgan Fundamental i.e., JPMorgan Fundamental and Litman Gregory go up and down completely randomly.
Pair Corralation between JPMorgan Fundamental and Litman Gregory
Given the investment horizon of 90 days JPMorgan Fundamental Data is expected to generate 1.17 times more return on investment than Litman Gregory. However, JPMorgan Fundamental is 1.17 times more volatile than Litman Gregory Funds. It trades about 0.4 of its potential returns per unit of risk. Litman Gregory Funds is currently generating about 0.26 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 Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Fundamental Data vs. Litman Gregory Funds
Performance |
| Timeline |
| JPMorgan Fundamental Data |
| Litman Gregory Funds |
JPMorgan Fundamental and Litman Gregory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Fundamental and Litman Gregory
The main advantage of trading using opposite JPMorgan Fundamental and Litman Gregory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Fundamental position performs unexpectedly, Litman Gregory 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 Litman Gregory will offset losses from the drop in Litman Gregory's long position.| JPMorgan Fundamental vs. FT Vest Equity | JPMorgan Fundamental vs. Northern Lights | JPMorgan Fundamental vs. Dimensional International High | JPMorgan Fundamental vs. Matthews China Discovery |
| Litman Gregory vs. FT Vest Equity | Litman Gregory vs. Northern Lights | Litman Gregory vs. Dimensional International High | Litman Gregory 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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