Correlation Between Aristotle Funds and Jp Morgan

Can any of the company-specific risk be diversified away by investing in both Aristotle Funds and Jp Morgan 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 Aristotle Funds and Jp Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aristotle Funds Series and Jp Morgan Smartretirement, you can compare the effects of market volatilities on Aristotle Funds and Jp Morgan 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 Aristotle Funds with a short position of Jp Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristotle Funds and Jp Morgan.

Diversification Opportunities for Aristotle Funds and Jp Morgan

0.77

Correlation Coefficient

Aristotle Funds  Jp Morgan

Poor diversification

The 3 months correlation between Aristotle and JTSQX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aristotle Funds Series and Jp Morgan Smartretirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jp Morgan Smartretirement and Aristotle Funds 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 Aristotle Funds Series are associated (or correlated) with Jp Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jp Morgan Smartretirement has no effect on the direction of Aristotle Funds i.e., Aristotle Funds and Jp Morgan go up and down completely randomly.

Pair Corralation between Aristotle Funds and Jp Morgan

Assuming the 90 days horizon Aristotle Funds is expected to generate 2.26 times less return on investment than Jp Morgan. In addition to that, Aristotle Funds is 1.53 times more volatile than Jp Morgan Smartretirement. It trades about 0.02 of its total potential returns per unit of risk. Jp Morgan Smartretirement is currently generating about 0.08 per unit of volatility. If you would invest  1,764  in Jp Morgan Smartretirement on October 3, 2024 and sell it today you would earn a total of  540.00  from holding Jp Morgan Smartretirement or generate 30.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aristotle Funds Series  vs.  Jp Morgan Smartretirement

Aristotle Funds Series

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aristotle Funds Series are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Aristotle Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jp Morgan Smartretirement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jp Morgan Smartretirement has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jp Morgan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aristotle Funds and Jp Morgan

The main advantage of trading using opposite Aristotle Funds and Jp Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristotle Funds position performs unexpectedly, Jp Morgan 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 Jp Morgan will offset losses from the drop in Jp Morgan's long position.

The idea behind Aristotle Funds Series and Jp Morgan Smartretirement 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.