Correlation Between Aqr Large and Jpmorgan Intrepid

Can any of the company-specific risk be diversified away by investing in both Aqr Large and Jpmorgan Intrepid 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 Aqr Large and Jpmorgan Intrepid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aqr Large Cap and Jpmorgan Intrepid Value, you can compare the effects of market volatilities on Aqr Large and Jpmorgan Intrepid 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 Aqr Large with a short position of Jpmorgan Intrepid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Jpmorgan Intrepid.

Diversification Opportunities for Aqr Large and Jpmorgan Intrepid

0.44

Correlation Coefficient

Aqr Large  Jpmorgan Intrepid

Very weak diversification

The 3 months correlation between Aqr and Jpmorgan is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Jpmorgan Intrepid Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Intrepid Value and Aqr Large 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 Aqr Large Cap are associated (or correlated) with Jpmorgan Intrepid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Intrepid Value has no effect on the direction of Aqr Large i.e., Aqr Large and Jpmorgan Intrepid go up and down completely randomly.

Pair Corralation between Aqr Large and Jpmorgan Intrepid

Assuming the 90 days horizon Aqr Large Cap is expected to under-perform the Jpmorgan Intrepid. In addition to that, Aqr Large is 1.72 times more volatile than Jpmorgan Intrepid Value. It trades about -0.08 of its total potential returns per unit of risk. Jpmorgan Intrepid Value is currently generating about 0.05 per unit of volatility. If you would invest  3,006  in Jpmorgan Intrepid Value on December 20, 2024 and sell it today you would earn a total of  71.00  from holding Jpmorgan Intrepid Value or generate 2.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Aqr Large Cap  vs.  Jpmorgan Intrepid Value

Aqr Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aqr Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Jpmorgan Intrepid Value

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Intrepid Value are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Intrepid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aqr Large and Jpmorgan Intrepid

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

The idea behind Aqr Large Cap and Jpmorgan Intrepid Value 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.