Correlation Between Arrow Managed and Jpmorgan Small
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Jpmorgan 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 Arrow Managed and Jpmorgan Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Jpmorgan Small Cap, you can compare the effects of market volatilities on Arrow Managed and Jpmorgan 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 Arrow Managed with a short position of Jpmorgan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Jpmorgan Small.
Diversification Opportunities for Arrow Managed and Jpmorgan Small
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arrow and Jpmorgan is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Jpmorgan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Small Cap and Arrow Managed 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 Arrow Managed Futures are associated (or correlated) with Jpmorgan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Small Cap has no effect on the direction of Arrow Managed i.e., Arrow Managed and Jpmorgan Small go up and down completely randomly.
Pair Corralation between Arrow Managed and Jpmorgan Small
Assuming the 90 days horizon Arrow Managed is expected to generate 3.76 times less return on investment than Jpmorgan Small. But when comparing it to its historical volatility, Arrow Managed Futures is 1.16 times less risky than Jpmorgan Small. It trades about 0.06 of its potential returns per unit of risk. Jpmorgan Small Cap is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,874 in Jpmorgan Small Cap on August 29, 2024 and sell it today you would earn a total of 142.00 from holding Jpmorgan Small Cap or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Jpmorgan Small Cap
Performance |
| Timeline |
| Arrow Managed Futures |
| Jpmorgan Small Cap |
Arrow Managed and Jpmorgan Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Jpmorgan Small
The main advantage of trading using opposite Arrow Managed and Jpmorgan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Jpmorgan 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 Jpmorgan Small will offset losses from the drop in Jpmorgan Small's long position.| Arrow Managed vs. Pimco Trends Managed | Arrow Managed vs. HUMANA INC | Arrow Managed vs. Aquagold International | Arrow Managed vs. Barloworld Ltd ADR |
| Jpmorgan Small vs. Vanguard Small Cap Value | Jpmorgan Small vs. Vanguard Small Cap Value | Jpmorgan Small vs. American Beacon Small |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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