Correlation Between Health Care and Jpmorgan Growth
Can any of the company-specific risk be diversified away by investing in both Health Care and Jpmorgan Growth 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 Health Care and Jpmorgan Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health Care Fund and Jpmorgan Growth Advantage, you can compare the effects of market volatilities on Health Care and Jpmorgan Growth 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 Health Care with a short position of Jpmorgan Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Care and Jpmorgan Growth.
Diversification Opportunities for Health Care and Jpmorgan Growth
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Health and Jpmorgan is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Health Care Fund and Jpmorgan Growth Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Growth Advantage and Health Care 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 Health Care Fund are associated (or correlated) with Jpmorgan Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Growth Advantage has no effect on the direction of Health Care i.e., Health Care and Jpmorgan Growth go up and down completely randomly.
Pair Corralation between Health Care and Jpmorgan Growth
Assuming the 90 days horizon Health Care is expected to generate 3.13 times less return on investment than Jpmorgan Growth. But when comparing it to its historical volatility, Health Care Fund is 1.47 times less risky than Jpmorgan Growth. It trades about 0.05 of its potential returns per unit of risk. Jpmorgan Growth Advantage is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,164 in Jpmorgan Growth Advantage on September 2, 2024 and sell it today you would earn a total of 1,012 from holding Jpmorgan Growth Advantage or generate 46.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health Care Fund vs. Jpmorgan Growth Advantage
Performance |
| Timeline |
| Health Care Fund |
| Jpmorgan Growth Advantage |
Health Care and Jpmorgan Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health Care and Jpmorgan Growth
The main advantage of trading using opposite Health Care and Jpmorgan Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Care position performs unexpectedly, Jpmorgan Growth 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 Growth will offset losses from the drop in Jpmorgan Growth's long position.| Health Care vs. Siit Emerging Markets | Health Care vs. Artisan Emerging Markets | Health Care vs. Ashmore Emerging Markets | Health Care vs. Transamerica Emerging Markets |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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