Correlation Between Valic Company and Jp Morgan
Can any of the company-specific risk be diversified away by investing in both Valic Company and Jp Morgan 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 Valic Company and Jp Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Jp Morgan Smartretirement, you can compare the effects of market volatilities on Valic Company and Jp Morgan 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 Valic Company with a short position of Jp Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Jp Morgan.
Diversification Opportunities for Valic Company and Jp Morgan
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Valic and JTSQX is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Jp Morgan Smartretirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jp Morgan Smartretirement and Valic Company 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 Valic Company I are associated (or correlated) with Jp Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jp Morgan Smartretirement has no effect on the direction of Valic Company i.e., Valic Company and Jp Morgan go up and down completely randomly.
Pair Corralation between Valic Company and Jp Morgan
Assuming the 90 days horizon Valic Company is expected to generate 1.12 times less return on investment than Jp Morgan. But when comparing it to its historical volatility, Valic Company I is 1.34 times less risky than Jp Morgan. It trades about 0.1 of its potential returns per unit of risk. Jp Morgan Smartretirement is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,338 in Jp Morgan Smartretirement on August 26, 2024 and sell it today you would earn a total of 27.00 from holding Jp Morgan Smartretirement or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Jp Morgan Smartretirement
Performance |
| Timeline |
| Valic Company I |
| Jp Morgan Smartretirement |
Valic Company and Jp Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Jp Morgan
The main advantage of trading using opposite Valic Company and Jp Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Jp Morgan 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 Jp Morgan will offset losses from the drop in Jp Morgan's long position.| Valic Company vs. Pnc Emerging Markets | Valic Company vs. Aqr Long Short Equity | Valic Company vs. Aqr Equity Market | Valic Company vs. Artisan Emerging Markets |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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