Correlation Between Jpmorgan Equity and Amcap Fund
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Equity and Amcap 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 Amcap 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 Amcap Fund Class, you can compare the effects of market volatilities on Jpmorgan Equity and Amcap 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 Amcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Equity and Amcap Fund.
Diversification Opportunities for Jpmorgan Equity and Amcap Fund
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMORGAN and AMCAP is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Income and Amcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcap Fund Class 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 Amcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcap Fund Class has no effect on the direction of Jpmorgan Equity i.e., Jpmorgan Equity and Amcap Fund go up and down completely randomly.
Pair Corralation between Jpmorgan Equity and Amcap Fund
Assuming the 90 days horizon Jpmorgan Equity Income is expected to generate 0.97 times more return on investment than Amcap Fund. However, Jpmorgan Equity Income is 1.03 times less risky than Amcap Fund. It trades about 0.32 of its potential returns per unit of risk. Amcap Fund Class is currently generating about 0.29 per unit of risk. If you would invest 2,546 in Jpmorgan Equity Income on September 1, 2024 and sell it today you would earn a total of 142.00 from holding Jpmorgan Equity Income or generate 5.58% 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. Amcap Fund Class
Performance |
| Timeline |
| Jpmorgan Equity Income |
| Amcap Fund Class |
Jpmorgan Equity and Amcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Equity and Amcap Fund
The main advantage of trading using opposite Jpmorgan Equity and Amcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Equity position performs unexpectedly, Amcap 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 Amcap Fund will offset losses from the drop in Amcap Fund's long position.| Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 | Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 | Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 | Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 |
| Amcap Fund vs. The Gabelli Equity | Amcap Fund vs. Calamos Global Equity | Amcap Fund vs. Jpmorgan Equity Income | Amcap Fund vs. Small Cap Equity |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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