Correlation Between Jpmorgan Equity and Western Asset
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Equity and Western Asset 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 Western Asset 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 Western Asset Total, you can compare the effects of market volatilities on Jpmorgan Equity and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Equity and Western Asset.
Diversification Opportunities for Jpmorgan Equity and Western Asset
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JPMORGAN and WESTERN is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Income and Western Asset Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Total 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Total has no effect on the direction of Jpmorgan Equity i.e., Jpmorgan Equity and Western Asset go up and down completely randomly.
Pair Corralation between Jpmorgan Equity and Western Asset
Assuming the 90 days horizon Jpmorgan Equity Income is expected to generate 2.76 times more return on investment than Western Asset. However, Jpmorgan Equity is 2.76 times more volatile than Western Asset Total. It trades about 0.15 of its potential returns per unit of risk. Western Asset Total is currently generating about 0.1 per unit of risk. If you would invest 2,144 in Jpmorgan Equity Income on September 2, 2024 and sell it today you would earn a total of 548.00 from holding Jpmorgan Equity Income or generate 25.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Equity Income vs. Western Asset Total
Performance |
| Timeline |
| Jpmorgan Equity Income |
| Western Asset Total |
Jpmorgan Equity and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Equity and Western Asset
The main advantage of trading using opposite Jpmorgan Equity and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Equity position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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