Correlation Between Extended Market and Jpmorgan Floating
Can any of the company-specific risk be diversified away by investing in both Extended Market and Jpmorgan Floating 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 Extended Market and Jpmorgan Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extended Market Index and Jpmorgan Floating Rate, you can compare the effects of market volatilities on Extended Market and Jpmorgan Floating 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 Extended Market with a short position of Jpmorgan Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extended Market and Jpmorgan Floating.
Diversification Opportunities for Extended Market and Jpmorgan Floating
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Extended and Jpmorgan is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Extended Market Index and Jpmorgan Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Floating Rate and Extended Market 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 Extended Market Index are associated (or correlated) with Jpmorgan Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Floating Rate has no effect on the direction of Extended Market i.e., Extended Market and Jpmorgan Floating go up and down completely randomly.
Pair Corralation between Extended Market and Jpmorgan Floating
Assuming the 90 days horizon Extended Market Index is expected to generate 8.2 times more return on investment than Jpmorgan Floating. However, Extended Market is 8.2 times more volatile than Jpmorgan Floating Rate. It trades about 0.03 of its potential returns per unit of risk. Jpmorgan Floating Rate is currently generating about 0.18 per unit of risk. If you would invest 1,802 in Extended Market Index on October 9, 2024 and sell it today you would earn a total of 279.00 from holding Extended Market Index or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extended Market Index vs. Jpmorgan Floating Rate
Performance |
| Timeline |
| Extended Market Index |
| Jpmorgan Floating Rate |
Extended Market and Jpmorgan Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extended Market and Jpmorgan Floating
The main advantage of trading using opposite Extended Market and Jpmorgan Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extended Market position performs unexpectedly, Jpmorgan Floating 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 Floating will offset losses from the drop in Jpmorgan Floating's long position.| Extended Market vs. Gabelli Convertible And | Extended Market vs. Rationalpier 88 Convertible | Extended Market vs. Mainstay Vertible Fund | Extended Market vs. Absolute Convertible Arbitrage |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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