Correlation Between Payden Government and Jpmorgan Small
Can any of the company-specific risk be diversified away by investing in both Payden Government and Jpmorgan Small 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 Payden Government and Jpmorgan Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Government Fund and Jpmorgan Small Cap, you can compare the effects of market volatilities on Payden Government and Jpmorgan Small 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 Payden Government with a short position of Jpmorgan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Government and Jpmorgan Small.
Diversification Opportunities for Payden Government and Jpmorgan Small
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Payden and Jpmorgan is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Payden Government Fund and Jpmorgan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Small Cap and Payden Government 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 Payden Government Fund are associated (or correlated) with Jpmorgan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Small Cap has no effect on the direction of Payden Government i.e., Payden Government and Jpmorgan Small go up and down completely randomly.
Pair Corralation between Payden Government and Jpmorgan Small
Assuming the 90 days horizon Payden Government is expected to generate 4.99 times less return on investment than Jpmorgan Small. But when comparing it to its historical volatility, Payden Government Fund is 6.31 times less risky than Jpmorgan Small. It trades about 0.1 of its potential returns per unit of risk. Jpmorgan Small Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,312 in Jpmorgan Small Cap on September 12, 2024 and sell it today you would earn a total of 1,041 from holding Jpmorgan Small Cap or generate 19.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Payden Government Fund vs. Jpmorgan Small Cap
Performance |
| Timeline |
| Payden Government |
| Jpmorgan Small Cap |
Payden Government and Jpmorgan Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Government and Jpmorgan Small
The main advantage of trading using opposite Payden Government and Jpmorgan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Government position performs unexpectedly, Jpmorgan Small 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 Small will offset losses from the drop in Jpmorgan Small's long position.| Payden Government vs. SCOR PK | Payden Government vs. Morningstar Unconstrained Allocation | Payden Government vs. Via Renewables | Payden Government vs. Bondbloxx ETF Trust |
| Jpmorgan Small vs. Franklin Adjustable Government | Jpmorgan Small vs. Us Government Securities | Jpmorgan Small vs. Prudential Government Income | Jpmorgan Small vs. Payden Government Fund |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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