Correlation Between Growth Strategy and Jpmorgan Hedged
Can any of the company-specific risk be diversified away by investing in both Growth Strategy and Jpmorgan Hedged 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 Growth Strategy and Jpmorgan Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Strategy Fund and Jpmorgan Hedged Equity, you can compare the effects of market volatilities on Growth Strategy and Jpmorgan Hedged 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 Growth Strategy with a short position of Jpmorgan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and Jpmorgan Hedged.
Diversification Opportunities for Growth Strategy and Jpmorgan Hedged
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GROWTH and Jpmorgan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy Fund and Jpmorgan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Hedged Equity and Growth Strategy 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 Growth Strategy Fund are associated (or correlated) with Jpmorgan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Hedged Equity has no effect on the direction of Growth Strategy i.e., Growth Strategy and Jpmorgan Hedged go up and down completely randomly.
Pair Corralation between Growth Strategy and Jpmorgan Hedged
Assuming the 90 days horizon Growth Strategy is expected to generate 1.06 times less return on investment than Jpmorgan Hedged. In addition to that, Growth Strategy is 1.36 times more volatile than Jpmorgan Hedged Equity. It trades about 0.08 of its total potential returns per unit of risk. Jpmorgan Hedged Equity is currently generating about 0.12 per unit of volatility. If you would invest 1,422 in Jpmorgan Hedged Equity on September 3, 2024 and sell it today you would earn a total of 447.00 from holding Jpmorgan Hedged Equity or generate 31.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Strategy Fund vs. Jpmorgan Hedged Equity
Performance |
| Timeline |
| Growth Strategy |
| Jpmorgan Hedged Equity |
Growth Strategy and Jpmorgan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Strategy and Jpmorgan Hedged
The main advantage of trading using opposite Growth Strategy and Jpmorgan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy position performs unexpectedly, Jpmorgan Hedged 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 Hedged will offset losses from the drop in Jpmorgan Hedged's long position.| Growth Strategy vs. American Funds The | Growth Strategy vs. American Funds The | Growth Strategy vs. Income Fund Of | Growth Strategy vs. Income Fund Of |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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