Correlation Between American Funds and Jpmorgan Trust
Can any of the company-specific risk be diversified away by investing in both American Funds and Jpmorgan Trust 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 American Funds and Jpmorgan Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2065 and Jpmorgan Trust Iv, you can compare the effects of market volatilities on American Funds and Jpmorgan Trust 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 American Funds with a short position of Jpmorgan Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Jpmorgan Trust.
Diversification Opportunities for American Funds and Jpmorgan Trust
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Jpmorgan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2065 and Jpmorgan Trust Iv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Trust Iv and American Funds 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 American Funds 2065 are associated (or correlated) with Jpmorgan Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Trust Iv has no effect on the direction of American Funds i.e., American Funds and Jpmorgan Trust go up and down completely randomly.
Pair Corralation between American Funds and Jpmorgan Trust
Assuming the 90 days horizon American Funds 2065 is expected to under-perform the Jpmorgan Trust. But the mutual fund apears to be less risky and, when comparing its historical volatility, American Funds 2065 is 1.01 times less risky than Jpmorgan Trust. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Jpmorgan Trust Iv is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,094 in Jpmorgan Trust Iv on November 29, 2024 and sell it today you would earn a total of 3.00 from holding Jpmorgan Trust Iv or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2065 vs. Jpmorgan Trust Iv
Performance |
| Timeline |
| American Funds 2065 |
| Jpmorgan Trust Iv |
American Funds and Jpmorgan Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Jpmorgan Trust
The main advantage of trading using opposite American Funds and Jpmorgan Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Jpmorgan Trust 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 Trust will offset losses from the drop in Jpmorgan Trust's long position.| American Funds vs. Fidelity Advisor Energy | American Funds vs. Hennessy Bp Energy | American Funds vs. Salient Mlp Energy | American Funds vs. Franklin Natural Resources |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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