Correlation Between Jpmorgan Small and Edgewood Growth
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Small and Edgewood Growth 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 Small and Edgewood Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Small Cap and Edgewood Growth Fund, you can compare the effects of market volatilities on Jpmorgan Small and Edgewood Growth 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 Small with a short position of Edgewood Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Small and Edgewood Growth.
Diversification Opportunities for Jpmorgan Small and Edgewood Growth
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jpmorgan and Edgewood is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Small Cap and Edgewood Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewood Growth and Jpmorgan Small 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 Small Cap are associated (or correlated) with Edgewood Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewood Growth has no effect on the direction of Jpmorgan Small i.e., Jpmorgan Small and Edgewood Growth go up and down completely randomly.
Pair Corralation between Jpmorgan Small and Edgewood Growth
Assuming the 90 days horizon Jpmorgan Small Cap is expected to generate 1.45 times more return on investment than Edgewood Growth. However, Jpmorgan Small is 1.45 times more volatile than Edgewood Growth Fund. It trades about 0.24 of its potential returns per unit of risk. Edgewood Growth Fund is currently generating about 0.19 per unit of risk. If you would invest 2,084 in Jpmorgan Small Cap on August 27, 2024 and sell it today you would earn a total of 157.00 from holding Jpmorgan Small Cap or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Small Cap vs. Edgewood Growth Fund
Performance |
| Timeline |
| Jpmorgan Small Cap |
| Edgewood Growth |
Jpmorgan Small and Edgewood Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Small and Edgewood Growth
The main advantage of trading using opposite Jpmorgan Small and Edgewood Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Small position performs unexpectedly, Edgewood Growth 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 Edgewood Growth will offset losses from the drop in Edgewood Growth's long position.| Jpmorgan Small vs. Archer Balanced Fund | Jpmorgan Small vs. Vanguard Strategic Small Cap | Jpmorgan Small vs. Small Cap Stock | Jpmorgan Small vs. Eic Value Fund |
| Edgewood Growth vs. John Hancock Disciplined | Edgewood Growth vs. Diamond Hill Large | Edgewood Growth vs. Hartford Schroders Emerging | Edgewood Growth vs. Oakmark International Fund |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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