Correlation Between Western Asset and Jp Morgan
Can any of the company-specific risk be diversified away by investing in both Western Asset and Jp Morgan 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 Western Asset and Jp Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Mortgage and Jp Morgan Smartretirement, you can compare the effects of market volatilities on Western Asset and Jp Morgan 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 Western Asset with a short position of Jp Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Jp Morgan.
Diversification Opportunities for Western Asset and Jp Morgan
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and JTSQX is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Mortgage and Jp Morgan Smartretirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jp Morgan Smartretirement and Western Asset 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 Western Asset Mortgage are associated (or correlated) with Jp Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jp Morgan Smartretirement has no effect on the direction of Western Asset i.e., Western Asset and Jp Morgan go up and down completely randomly.
Pair Corralation between Western Asset and Jp Morgan
Assuming the 90 days horizon Western Asset Mortgage is expected to generate 0.7 times more return on investment than Jp Morgan. However, Western Asset Mortgage is 1.43 times less risky than Jp Morgan. It trades about 0.22 of its potential returns per unit of risk. Jp Morgan Smartretirement is currently generating about 0.06 per unit of risk. If you would invest 824.00 in Western Asset Mortgage on September 12, 2024 and sell it today you would earn a total of 11.00 from holding Western Asset Mortgage or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Mortgage vs. Jp Morgan Smartretirement
Performance |
| Timeline |
| Western Asset Mortgage |
| Jp Morgan Smartretirement |
Western Asset and Jp Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Jp Morgan
The main advantage of trading using opposite Western Asset and Jp Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Jp Morgan 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 Jp Morgan will offset losses from the drop in Jp Morgan's long position.| Western Asset vs. Metropolitan West Total | Western Asset vs. SCOR PK | Western Asset vs. Morningstar Unconstrained Allocation | Western Asset vs. Thrivent High Yield |
| Jp Morgan vs. Vanguard Target Retirement | Jp Morgan vs. American Funds 2050 | Jp Morgan vs. HUMANA INC | Jp Morgan vs. Barloworld Ltd ADR |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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