Correlation Between Jpmorgan Short-intermedia and Guidepath(r) Managed
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Short-intermedia and Guidepath(r) Managed 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 Jpmorgan Short-intermedia and Guidepath(r) Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Short Intermediate Municipal and Guidepath Managed Futures, you can compare the effects of market volatilities on Jpmorgan Short-intermedia and Guidepath(r) Managed 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 Jpmorgan Short-intermedia with a short position of Guidepath(r) Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Short-intermedia and Guidepath(r) Managed.
Diversification Opportunities for Jpmorgan Short-intermedia and Guidepath(r) Managed
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMORGAN and Guidepath(r) is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Short Intermediate Mu and Guidepath Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Managed Futures and Jpmorgan Short-intermedia 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 Jpmorgan Short Intermediate Municipal are associated (or correlated) with Guidepath(r) Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Managed Futures has no effect on the direction of Jpmorgan Short-intermedia i.e., Jpmorgan Short-intermedia and Guidepath(r) Managed go up and down completely randomly.
Pair Corralation between Jpmorgan Short-intermedia and Guidepath(r) Managed
Assuming the 90 days horizon Jpmorgan Short Intermediate Municipal is expected to generate 0.18 times more return on investment than Guidepath(r) Managed. However, Jpmorgan Short Intermediate Municipal is 5.55 times less risky than Guidepath(r) Managed. It trades about 0.07 of its potential returns per unit of risk. Guidepath Managed Futures is currently generating about -0.03 per unit of risk. If you would invest 1,022 in Jpmorgan Short Intermediate Municipal on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Jpmorgan Short Intermediate Municipal or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Short Intermediate Mu vs. Guidepath Managed Futures
Performance |
| Timeline |
| Jpmorgan Short-intermedia |
| Guidepath Managed Futures |
Jpmorgan Short-intermedia and Guidepath(r) Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Short-intermedia and Guidepath(r) Managed
The main advantage of trading using opposite Jpmorgan Short-intermedia and Guidepath(r) Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Short-intermedia position performs unexpectedly, Guidepath(r) Managed 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 Guidepath(r) Managed will offset losses from the drop in Guidepath(r) Managed's long position.The idea behind Jpmorgan Short Intermediate Municipal and Guidepath Managed Futures pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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