Correlation Between Swan Defined and Jpmorgan Hedged
Can any of the company-specific risk be diversified away by investing in both Swan Defined 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 Swan Defined and Jpmorgan Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swan Defined Risk and Jpmorgan Hedged Equity, you can compare the effects of market volatilities on Swan Defined 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 Swan Defined with a short position of Jpmorgan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swan Defined and Jpmorgan Hedged.
Diversification Opportunities for Swan Defined and Jpmorgan Hedged
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swan and Jpmorgan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Swan Defined Risk 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 Swan Defined 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 Swan Defined Risk 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 Swan Defined i.e., Swan Defined and Jpmorgan Hedged go up and down completely randomly.
Pair Corralation between Swan Defined and Jpmorgan Hedged
Assuming the 90 days horizon Swan Defined Risk is expected to under-perform the Jpmorgan Hedged. In addition to that, Swan Defined is 1.29 times more volatile than Jpmorgan Hedged Equity. It trades about -0.12 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 3,329 in Jpmorgan Hedged Equity on November 29, 2024 and sell it today you would lose (31.00) from holding Jpmorgan Hedged Equity or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swan Defined Risk vs. Jpmorgan Hedged Equity
Performance |
| Timeline |
| Swan Defined Risk |
| Jpmorgan Hedged Equity |
Swan Defined and Jpmorgan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swan Defined and Jpmorgan Hedged
The main advantage of trading using opposite Swan Defined and Jpmorgan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swan Defined 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.| Swan Defined vs. Government Securities Fund | Swan Defined vs. Transamerica Funds | Swan Defined vs. Us Government Securities | Swan Defined vs. Us Government Securities |
| Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Loomis Sayles Global |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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