Correlation Between Jpmorgan High and Aqr Long-short
Can any of the company-specific risk be diversified away by investing in both Jpmorgan High and Aqr Long-short 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 High and Aqr Long-short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan High Yield and Aqr Long Short Equity, you can compare the effects of market volatilities on Jpmorgan High and Aqr Long-short 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 High with a short position of Aqr Long-short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan High and Aqr Long-short.
Diversification Opportunities for Jpmorgan High and Aqr Long-short
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jpmorgan and Aqr is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan High Yield and Aqr Long Short Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Long Short and Jpmorgan High 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 High Yield are associated (or correlated) with Aqr Long-short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Long Short has no effect on the direction of Jpmorgan High i.e., Jpmorgan High and Aqr Long-short go up and down completely randomly.
Pair Corralation between Jpmorgan High and Aqr Long-short
Assuming the 90 days horizon Jpmorgan High is expected to generate 2.71 times less return on investment than Aqr Long-short. But when comparing it to its historical volatility, Jpmorgan High Yield is 1.94 times less risky than Aqr Long-short. It trades about 0.16 of its potential returns per unit of risk. Aqr Long Short Equity is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,002 in Aqr Long Short Equity on December 1, 2024 and sell it today you would earn a total of 684.00 from holding Aqr Long Short Equity or generate 68.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan High Yield vs. Aqr Long Short Equity
Performance |
| Timeline |
| Jpmorgan High Yield |
| Aqr Long Short |
Jpmorgan High and Aqr Long-short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan High and Aqr Long-short
The main advantage of trading using opposite Jpmorgan High and Aqr Long-short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan High position performs unexpectedly, Aqr Long-short 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 Aqr Long-short will offset losses from the drop in Aqr Long-short's long position.| Jpmorgan High vs. Putnam Vertible Securities | Jpmorgan High vs. Advent Claymore Convertible | Jpmorgan High vs. Absolute Convertible Arbitrage | Jpmorgan High vs. Victory Incore Investment |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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