Correlation Between City National and Jpmorgan High
Can any of the company-specific risk be diversified away by investing in both City National and Jpmorgan High 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 City National and Jpmorgan High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Jpmorgan High Yield, you can compare the effects of market volatilities on City National and Jpmorgan High 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 City National with a short position of Jpmorgan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Jpmorgan High.
Diversification Opportunities for City National and Jpmorgan High
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between City and Jpmorgan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Jpmorgan High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan High Yield and City National 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 City National Rochdale are associated (or correlated) with Jpmorgan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan High Yield has no effect on the direction of City National i.e., City National and Jpmorgan High go up and down completely randomly.
Pair Corralation between City National and Jpmorgan High
Assuming the 90 days horizon City National is expected to generate 1.33 times less return on investment than Jpmorgan High. But when comparing it to its historical volatility, City National Rochdale is 1.76 times less risky than Jpmorgan High. It trades about 0.26 of its potential returns per unit of risk. Jpmorgan High Yield is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 570.00 in Jpmorgan High Yield on September 12, 2024 and sell it today you would earn a total of 94.00 from holding Jpmorgan High Yield or generate 16.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
City National Rochdale vs. Jpmorgan High Yield
Performance |
| Timeline |
| City National Rochdale |
| Jpmorgan High Yield |
City National and Jpmorgan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Jpmorgan High
The main advantage of trading using opposite City National and Jpmorgan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Jpmorgan High 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 High will offset losses from the drop in Jpmorgan High's long position.| City National vs. Allianzgi Diversified Income | City National vs. Blackrock Conservative Prprdptfinstttnl | City National vs. Lord Abbett Diversified | City National vs. Wealthbuilder Conservative Allocation |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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