Correlation Between Jpmorgan Short-intermedia and Consumer Products
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Short-intermedia and Consumer Products 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 Consumer Products 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 Consumer Products Fund, you can compare the effects of market volatilities on Jpmorgan Short-intermedia and Consumer Products 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 Consumer Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Short-intermedia and Consumer Products.
Diversification Opportunities for Jpmorgan Short-intermedia and Consumer Products
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMORGAN and Consumer is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Short Intermediate Mu and Consumer Products Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Products 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 Consumer Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Products has no effect on the direction of Jpmorgan Short-intermedia i.e., Jpmorgan Short-intermedia and Consumer Products go up and down completely randomly.
Pair Corralation between Jpmorgan Short-intermedia and Consumer Products
Assuming the 90 days horizon Jpmorgan Short-intermedia is expected to generate 6.64 times less return on investment than Consumer Products. But when comparing it to its historical volatility, Jpmorgan Short Intermediate Municipal is 13.75 times less risky than Consumer Products. It trades about 0.09 of its potential returns per unit of risk. Consumer Products Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,856 in Consumer Products Fund on September 2, 2024 and sell it today you would earn a total of 505.00 from holding Consumer Products Fund or generate 13.1% 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. Consumer Products Fund
Performance |
| Timeline |
| Jpmorgan Short-intermedia |
| Consumer Products |
Jpmorgan Short-intermedia and Consumer Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Short-intermedia and Consumer Products
The main advantage of trading using opposite Jpmorgan Short-intermedia and Consumer Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Short-intermedia position performs unexpectedly, Consumer Products 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 Consumer Products will offset losses from the drop in Consumer Products' long position.The idea behind Jpmorgan Short Intermediate Municipal and Consumer Products Fund 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 Stocks Directory module to find actively traded stocks across global markets.
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