Correlation Between Ab Bond and Jpmorgan Small

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Can any of the company-specific risk be diversified away by investing in both Ab Bond and Jpmorgan Small 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 Ab Bond and Jpmorgan Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Jpmorgan Small Cap, you can compare the effects of market volatilities on Ab Bond and Jpmorgan Small 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 Ab Bond with a short position of Jpmorgan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Jpmorgan Small.

Diversification Opportunities for Ab Bond and Jpmorgan Small

ABNYXJpmorganDiversified AwayABNYXJpmorganDiversified Away100%
-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between ABNYX and Jpmorgan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Jpmorgan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Small Cap and Ab Bond 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 Ab Bond Inflation are associated (or correlated) with Jpmorgan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Small Cap has no effect on the direction of Ab Bond i.e., Ab Bond and Jpmorgan Small go up and down completely randomly.

Pair Corralation between Ab Bond and Jpmorgan Small

Assuming the 90 days horizon Ab Bond is expected to generate 3.78 times less return on investment than Jpmorgan Small. But when comparing it to its historical volatility, Ab Bond Inflation is 4.89 times less risky than Jpmorgan Small. It trades about 0.07 of its potential returns per unit of risk. Jpmorgan Small Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,324  in Jpmorgan Small Cap on September 14, 2024 and sell it today you would earn a total of  594.00  from holding Jpmorgan Small Cap or generate 25.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Ab Bond Inflation  vs.  Jpmorgan Small Cap

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 051015
JavaScript chart by amCharts 3.21.15ABNYX PSOPX
       Timeline  
Ab Bond Inflation 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ab Bond Inflation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ab Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec10.410.4510.510.55
Jpmorgan Small Cap 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days Jpmorgan Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2929.53030.53131.5

Ab Bond and Jpmorgan Small Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.19-0.0842-0.0561-0.0281-0.0013360.02280.04950.07620.120.33 246810
JavaScript chart by amCharts 3.21.15ABNYX PSOPX
       Returns  

Pair Trading with Ab Bond and Jpmorgan Small

The main advantage of trading using opposite Ab Bond and Jpmorgan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Jpmorgan Small 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 Small will offset losses from the drop in Jpmorgan Small's long position.
The idea behind Ab Bond Inflation and Jpmorgan Small Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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