Correlation Between Jpmorgan Small and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Small and Ab Municipal 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 Small and Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Small Cap and Ab Municipal Bond, you can compare the effects of market volatilities on Jpmorgan Small and Ab Municipal 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 Small with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Small and Ab Municipal.
Diversification Opportunities for Jpmorgan Small and Ab Municipal
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jpmorgan and AUNTX is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Small Cap and Ab Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Municipal Bond and Jpmorgan 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 Jpmorgan Small Cap are associated (or correlated) with Ab Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Municipal Bond has no effect on the direction of Jpmorgan Small i.e., Jpmorgan Small and Ab Municipal go up and down completely randomly.
Pair Corralation between Jpmorgan Small and Ab Municipal
Assuming the 90 days horizon Jpmorgan Small Cap is expected to generate 8.7 times more return on investment than Ab Municipal. However, Jpmorgan Small is 8.7 times more volatile than Ab Municipal Bond. It trades about 0.21 of its potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.2 per unit of risk. If you would invest 6,015 in Jpmorgan Small Cap on August 29, 2024 and sell it today you would earn a total of 399.00 from holding Jpmorgan Small Cap or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Small Cap vs. Ab Municipal Bond
Performance |
| Timeline |
| Jpmorgan Small Cap |
| Ab Municipal Bond |
Jpmorgan Small and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Small and Ab Municipal
The main advantage of trading using opposite Jpmorgan Small and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Small position performs unexpectedly, Ab Municipal 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 Ab Municipal will offset losses from the drop in Ab Municipal's long position.| Jpmorgan Small vs. Vanguard Small Cap Index | Jpmorgan Small vs. T Rowe Price | Jpmorgan Small vs. HUMANA INC | Jpmorgan Small vs. Aquagold International |
| Ab Municipal vs. Vanguard Limited Term Tax Exempt | Ab Municipal vs. HUMANA INC | Ab Municipal vs. Aquagold International | Ab Municipal vs. Barloworld Ltd ADR |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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