Correlation Between Great West and Jpmorgan High
Can any of the company-specific risk be diversified away by investing in both Great West and Jpmorgan High 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 Great West and Jpmorgan High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Loomis Sayles and Jpmorgan High Yield, you can compare the effects of market volatilities on Great West and Jpmorgan High 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 Great West with a short position of Jpmorgan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Jpmorgan High.
Diversification Opportunities for Great West and Jpmorgan High
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Great and Jpmorgan is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Great West Loomis Sayles and Jpmorgan High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan High Yield and Great West 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 Great West Loomis Sayles are associated (or correlated) with Jpmorgan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan High Yield has no effect on the direction of Great West i.e., Great West and Jpmorgan High go up and down completely randomly.
Pair Corralation between Great West and Jpmorgan High
Assuming the 90 days horizon Great West is expected to generate 1.15 times less return on investment than Jpmorgan High. In addition to that, Great West is 4.8 times more volatile than Jpmorgan High Yield. It trades about 0.03 of its total potential returns per unit of risk. Jpmorgan High Yield is currently generating about 0.15 per unit of volatility. If you would invest 547.00 in Jpmorgan High Yield on November 6, 2024 and sell it today you would earn a total of 110.00 from holding Jpmorgan High Yield or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Loomis Sayles vs. Jpmorgan High Yield
Performance |
| Timeline |
| Great West Loomis |
| Jpmorgan High Yield |
Great West and Jpmorgan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Jpmorgan High
The main advantage of trading using opposite Great West and Jpmorgan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Jpmorgan High 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 High will offset losses from the drop in Jpmorgan High's long position.| Great West vs. Vanguard Health Care | Great West vs. Tekla Healthcare Investors | Great West vs. Baillie Gifford Health | Great West vs. Hartford Healthcare Hls |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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