Correlation Between Merck and Jpmorgan Trust
Can any of the company-specific risk be diversified away by investing in both Merck and Jpmorgan Trust 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 Merck and Jpmorgan Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Jpmorgan Trust I, you can compare the effects of market volatilities on Merck and Jpmorgan Trust 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 Merck with a short position of Jpmorgan Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Jpmorgan Trust.
Diversification Opportunities for Merck and Jpmorgan Trust
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Jpmorgan is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Jpmorgan Trust I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Trust I and Merck 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 Merck Company are associated (or correlated) with Jpmorgan Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Trust I has no effect on the direction of Merck i.e., Merck and Jpmorgan Trust go up and down completely randomly.
Pair Corralation between Merck and Jpmorgan Trust
Considering the 90-day investment horizon Merck Company is expected to under-perform the Jpmorgan Trust. In addition to that, Merck is 3.93 times more volatile than Jpmorgan Trust I. It trades about -0.12 of its total potential returns per unit of risk. Jpmorgan Trust I is currently generating about 0.04 per unit of volatility. If you would invest 98.00 in Jpmorgan Trust I on September 3, 2024 and sell it today you would earn a total of 2.00 from holding Jpmorgan Trust I or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.9% |
| Values | Daily Returns |
Merck Company vs. Jpmorgan Trust I
Performance |
| Timeline |
| Merck Company |
| Jpmorgan Trust I |
Merck and Jpmorgan Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Jpmorgan Trust
The main advantage of trading using opposite Merck and Jpmorgan Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Jpmorgan Trust 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 Trust will offset losses from the drop in Jpmorgan Trust's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
| Jpmorgan Trust vs. Small Midcap Dividend Income | Jpmorgan Trust vs. The Hartford Small | Jpmorgan Trust vs. Rbb Fund | Jpmorgan Trust vs. Qs Small Capitalization |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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