Correlation Between Jpmorgan Equity and High Yield
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Equity and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Jpmorgan Equity and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Equity and High Yield.
Diversification Opportunities for Jpmorgan Equity and High Yield
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMORGAN and High is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Income and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Jpmorgan Equity i.e., Jpmorgan Equity and High Yield go up and down completely randomly.
Pair Corralation between Jpmorgan Equity and High Yield
Assuming the 90 days horizon Jpmorgan Equity Income is expected to generate 4.46 times more return on investment than High Yield. However, Jpmorgan Equity is 4.46 times more volatile than High Yield Fund. It trades about 0.33 of its potential returns per unit of risk. High Yield Fund is currently generating about 0.17 per unit of risk. If you would invest 2,544 in Jpmorgan Equity Income on September 2, 2024 and sell it today you would earn a total of 148.00 from holding Jpmorgan Equity Income or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Equity Income vs. High Yield Fund
Performance |
| Timeline |
| Jpmorgan Equity Income |
| High Yield Fund |
Jpmorgan Equity and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Equity and High Yield
The main advantage of trading using opposite Jpmorgan Equity and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Equity position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield'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 |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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