Correlation Between Jpmorgan Equity and Short-term Fund
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Equity and Short-term Fund 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 Equity and Short-term Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Equity Income and Short Term Fund C, you can compare the effects of market volatilities on Jpmorgan Equity and Short-term Fund 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 Equity with a short position of Short-term Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Equity and Short-term Fund.
Diversification Opportunities for Jpmorgan Equity and Short-term Fund
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jpmorgan and Short-term is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Income and Short Term Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Fund and Jpmorgan Equity 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 Equity Income are associated (or correlated) with Short-term Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Fund has no effect on the direction of Jpmorgan Equity i.e., Jpmorgan Equity and Short-term Fund go up and down completely randomly.
Pair Corralation between Jpmorgan Equity and Short-term Fund
Assuming the 90 days horizon Jpmorgan Equity Income is expected to generate 8.03 times more return on investment than Short-term Fund. However, Jpmorgan Equity is 8.03 times more volatile than Short Term Fund C. It trades about 0.16 of its potential returns per unit of risk. Short Term Fund C is currently generating about 0.2 per unit of risk. If you would invest 2,345 in Jpmorgan Equity Income on September 3, 2024 and sell it today you would earn a total of 331.00 from holding Jpmorgan Equity Income or generate 14.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Equity Income vs. Short Term Fund C
Performance |
| Timeline |
| Jpmorgan Equity Income |
| Short Term Fund |
Jpmorgan Equity and Short-term Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Equity and Short-term Fund
The main advantage of trading using opposite Jpmorgan Equity and Short-term Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Equity position performs unexpectedly, Short-term Fund 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 Short-term Fund will offset losses from the drop in Short-term Fund's long position.| Jpmorgan Equity vs. Lord Abbett Diversified | Jpmorgan Equity vs. Jhancock Diversified Macro | Jpmorgan Equity vs. Evaluator Conservative Rms | Jpmorgan Equity vs. Massmutual Premier Diversified |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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