Correlation Between Western Asset and Jpmorgan Strategic
Can any of the company-specific risk be diversified away by investing in both Western Asset and Jpmorgan Strategic 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 Western Asset and Jpmorgan Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Total and Jpmorgan Strategic Income, you can compare the effects of market volatilities on Western Asset and Jpmorgan Strategic 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 Western Asset with a short position of Jpmorgan Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Jpmorgan Strategic.
Diversification Opportunities for Western Asset and Jpmorgan Strategic
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Jpmorgan is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Total and Jpmorgan Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Strategic Income and Western Asset 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 Western Asset Total are associated (or correlated) with Jpmorgan Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Strategic Income has no effect on the direction of Western Asset i.e., Western Asset and Jpmorgan Strategic go up and down completely randomly.
Pair Corralation between Western Asset and Jpmorgan Strategic
Assuming the 90 days horizon Western Asset Total is expected to generate 3.87 times more return on investment than Jpmorgan Strategic. However, Western Asset is 3.87 times more volatile than Jpmorgan Strategic Income. It trades about 0.1 of its potential returns per unit of risk. Jpmorgan Strategic Income is currently generating about 0.33 per unit of risk. If you would invest 864.00 in Western Asset Total on September 2, 2024 and sell it today you would earn a total of 51.00 from holding Western Asset Total or generate 5.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Total vs. Jpmorgan Strategic Income
Performance |
| Timeline |
| Western Asset Total |
| Jpmorgan Strategic Income |
Western Asset and Jpmorgan Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Jpmorgan Strategic
The main advantage of trading using opposite Western Asset and Jpmorgan Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Jpmorgan Strategic 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 Strategic will offset losses from the drop in Jpmorgan Strategic's long position.| Western Asset vs. Franklin Mutual Beacon | Western Asset vs. Templeton Developing Markets | Western Asset vs. Franklin Mutual Global | Western Asset vs. Franklin Mutual Global |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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