Correlation Between Federated Pennsylvania and Jpmorgan International
Can any of the company-specific risk be diversified away by investing in both Federated Pennsylvania and Jpmorgan International 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 Federated Pennsylvania and Jpmorgan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Pennsylvania Municipal and Jpmorgan International Value, you can compare the effects of market volatilities on Federated Pennsylvania and Jpmorgan International 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 Federated Pennsylvania with a short position of Jpmorgan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Pennsylvania and Jpmorgan International.
Diversification Opportunities for Federated Pennsylvania and Jpmorgan International
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Jpmorgan is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Federated Pennsylvania Municip and Jpmorgan International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan International and Federated Pennsylvania 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 Federated Pennsylvania Municipal are associated (or correlated) with Jpmorgan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan International has no effect on the direction of Federated Pennsylvania i.e., Federated Pennsylvania and Jpmorgan International go up and down completely randomly.
Pair Corralation between Federated Pennsylvania and Jpmorgan International
Assuming the 90 days horizon Federated Pennsylvania is expected to generate 3.87 times less return on investment than Jpmorgan International. But when comparing it to its historical volatility, Federated Pennsylvania Municipal is 3.85 times less risky than Jpmorgan International. It trades about 0.08 of its potential returns per unit of risk. Jpmorgan International Value is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,117 in Jpmorgan International Value on September 12, 2024 and sell it today you would earn a total of 385.00 from holding Jpmorgan International Value or generate 34.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Pennsylvania Municip vs. Jpmorgan International Value
Performance |
| Timeline |
| Federated Pennsylvania |
| Jpmorgan International |
Federated Pennsylvania and Jpmorgan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Pennsylvania and Jpmorgan International
The main advantage of trading using opposite Federated Pennsylvania and Jpmorgan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Pennsylvania position performs unexpectedly, Jpmorgan International 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 Jpmorgan International will offset losses from the drop in Jpmorgan International's long position.| Federated Pennsylvania vs. Balanced Fund Investor | Federated Pennsylvania vs. Multimedia Portfolio Multimedia | Federated Pennsylvania vs. T Rowe Price | Federated Pennsylvania vs. L Abbett Fundamental |
| Jpmorgan International vs. Lord Abbett Diversified | Jpmorgan International vs. T Rowe Price | Jpmorgan International vs. Blackrock Sm Cap | Jpmorgan International vs. Tiaa Cref Small Cap Blend |
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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