Correlation Between Western Asset and Jpmorgan Value
Can any of the company-specific risk be diversified away by investing in both Western Asset and Jpmorgan Value 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 Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset E and Jpmorgan Value Advantage, you can compare the effects of market volatilities on Western Asset and Jpmorgan Value 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 Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Jpmorgan Value.
Diversification Opportunities for Western Asset and Jpmorgan Value
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Jpmorgan is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset E and Jpmorgan Value Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Value Advantage 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 E are associated (or correlated) with Jpmorgan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Value Advantage has no effect on the direction of Western Asset i.e., Western Asset and Jpmorgan Value go up and down completely randomly.
Pair Corralation between Western Asset and Jpmorgan Value
Assuming the 90 days horizon Western Asset is expected to generate 6.2 times less return on investment than Jpmorgan Value. But when comparing it to its historical volatility, Western Asset E is 2.18 times less risky than Jpmorgan Value. It trades about 0.07 of its potential returns per unit of risk. Jpmorgan Value Advantage is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,768 in Jpmorgan Value Advantage on October 26, 2024 and sell it today you would earn a total of 105.00 from holding Jpmorgan Value Advantage or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset E vs. Jpmorgan Value Advantage
Performance |
| Timeline |
| Western Asset E |
| Jpmorgan Value Advantage |
Western Asset and Jpmorgan Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Jpmorgan Value
The main advantage of trading using opposite Western Asset and Jpmorgan Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Jpmorgan Value 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 Value will offset losses from the drop in Jpmorgan Value's long position.| Western Asset vs. Fwnhtx | Western Asset vs. Flakqx | Western Asset vs. Astoncrosswind Small Cap | Western Asset vs. Fbanjx |
| Jpmorgan Value vs. Jpmorgan Growth Advantage | Jpmorgan Value vs. Jpmorgan Equity Income | Jpmorgan Value vs. John Hancock Disciplined | Jpmorgan Value vs. Jpmorgan Mid Cap |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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