Correlation Between Western Asset and Jpmorgan Diversified
Can any of the company-specific risk be diversified away by investing in both Western Asset and Jpmorgan Diversified 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 Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Jpmorgan Diversified Fund, you can compare the effects of market volatilities on Western Asset and Jpmorgan Diversified 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 Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Jpmorgan Diversified.
Diversification Opportunities for Western Asset and Jpmorgan Diversified
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Jpmorgan is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Jpmorgan Diversified Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Diversified 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 Diversified are associated (or correlated) with Jpmorgan Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Diversified has no effect on the direction of Western Asset i.e., Western Asset and Jpmorgan Diversified go up and down completely randomly.
Pair Corralation between Western Asset and Jpmorgan Diversified
Assuming the 90 days horizon Western Asset is expected to generate 1.62 times less return on investment than Jpmorgan Diversified. But when comparing it to its historical volatility, Western Asset Diversified is 1.6 times less risky than Jpmorgan Diversified. It trades about 0.16 of its potential returns per unit of risk. Jpmorgan Diversified Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,619 in Jpmorgan Diversified Fund on September 14, 2024 and sell it today you would earn a total of 22.00 from holding Jpmorgan Diversified Fund or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Jpmorgan Diversified Fund
Performance |
| Timeline |
| Western Asset Diversified |
| Jpmorgan Diversified |
Western Asset and Jpmorgan Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Jpmorgan Diversified
The main advantage of trading using opposite Western Asset and Jpmorgan Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Jpmorgan Diversified 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 Diversified will offset losses from the drop in Jpmorgan Diversified's long position.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Jpmorgan Diversified vs. Clearbridge Value Trust | Jpmorgan Diversified vs. Amg Managers Montag | Jpmorgan Diversified vs. Clearbridge Appreciation Fund | Jpmorgan Diversified vs. Brown Advisory Small 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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