Correlation Between California Bond and Jpmorgan Smartretirement
Can any of the company-specific risk be diversified away by investing in both California Bond and Jpmorgan Smartretirement 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 California Bond and Jpmorgan Smartretirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Jpmorgan Smartretirement Income, you can compare the effects of market volatilities on California Bond and Jpmorgan Smartretirement 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 California Bond with a short position of Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Jpmorgan Smartretirement.
Diversification Opportunities for California Bond and Jpmorgan Smartretirement
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between California and Jpmorgan is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Jpmorgan Smartretirement Incom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement and California Bond 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 California Bond Fund are associated (or correlated) with Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of California Bond i.e., California Bond and Jpmorgan Smartretirement go up and down completely randomly.
Pair Corralation between California Bond and Jpmorgan Smartretirement
Assuming the 90 days horizon California Bond is expected to generate 2.01 times less return on investment than Jpmorgan Smartretirement. But when comparing it to its historical volatility, California Bond Fund is 1.77 times less risky than Jpmorgan Smartretirement. It trades about 0.07 of its potential returns per unit of risk. Jpmorgan Smartretirement Income is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,373 in Jpmorgan Smartretirement Income on September 4, 2024 and sell it today you would earn a total of 251.00 from holding Jpmorgan Smartretirement Income or generate 18.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. Jpmorgan Smartretirement Incom
Performance |
| Timeline |
| California Bond |
| Jpmorgan Smartretirement |
California Bond and Jpmorgan Smartretirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Jpmorgan Smartretirement
The main advantage of trading using opposite California Bond and Jpmorgan Smartretirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond position performs unexpectedly, Jpmorgan Smartretirement 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 Smartretirement will offset losses from the drop in Jpmorgan Smartretirement's long position.| California Bond vs. Goldman Sachs Growth | California Bond vs. Smallcap Growth Fund | California Bond vs. L Abbett Growth | California Bond vs. Small Pany Growth |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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