Correlation Between Scout Small and Jpmorgan Small
Can any of the company-specific risk be diversified away by investing in both Scout Small and Jpmorgan Small 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 Scout Small and Jpmorgan Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scout Small Cap and Jpmorgan Small Cap, you can compare the effects of market volatilities on Scout Small and Jpmorgan Small 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 Scout Small with a short position of Jpmorgan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scout Small and Jpmorgan Small.
Diversification Opportunities for Scout Small and Jpmorgan Small
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Scout and Jpmorgan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Scout Small Cap and Jpmorgan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Small Cap and Scout Small 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 Scout Small Cap are associated (or correlated) with Jpmorgan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Small Cap has no effect on the direction of Scout Small i.e., Scout Small and Jpmorgan Small go up and down completely randomly.
Pair Corralation between Scout Small and Jpmorgan Small
Assuming the 90 days horizon Scout Small Cap is expected to generate 1.12 times more return on investment than Jpmorgan Small. However, Scout Small is 1.12 times more volatile than Jpmorgan Small Cap. It trades about 0.06 of its potential returns per unit of risk. Jpmorgan Small Cap is currently generating about 0.03 per unit of risk. If you would invest 2,422 in Scout Small Cap on September 14, 2024 and sell it today you would earn a total of 1,025 from holding Scout Small Cap or generate 42.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scout Small Cap vs. Jpmorgan Small Cap
Performance |
| Timeline |
| Scout Small Cap |
| Jpmorgan Small Cap |
Scout Small and Jpmorgan Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scout Small and Jpmorgan Small
The main advantage of trading using opposite Scout Small and Jpmorgan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scout Small position performs unexpectedly, Jpmorgan Small 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 Small will offset losses from the drop in Jpmorgan Small's long position.| Scout Small vs. Carillon Chartwell Short | Scout Small vs. Chartwell Short Duration | Scout Small vs. Carillon Chartwell Short | Scout Small vs. Eagle Growth Income |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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