Correlation Between Bbh Intermediate and Jpmorgan

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

By analyzing existing cross correlation between Bbh Intermediate Municipal and Jpmorgan Research Equity, you can compare the effects of market volatilities on Bbh Intermediate and Jpmorgan 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 Bbh Intermediate with a short position of Jpmorgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and Jpmorgan.

Diversification Opportunities for Bbh Intermediate and Jpmorgan

0.59

Correlation Coefficient

Bbh Intermediate  Jpmorgan

Very weak diversification

The 3 months correlation between Bbh and Jpmorgan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and Jpmorgan Research Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Research Equity and Bbh Intermediate 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 Bbh Intermediate Municipal are associated (or correlated) with Jpmorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Research Equity has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and Jpmorgan go up and down completely randomly.

Pair Corralation between Bbh Intermediate and Jpmorgan

Assuming the 90 days horizon Bbh Intermediate Municipal is expected to under-perform the Jpmorgan. But the mutual fund apears to be less risky and, when comparing its historical volatility, Bbh Intermediate Municipal is 2.44 times less risky than Jpmorgan. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Jpmorgan Research Equity is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,436  in Jpmorgan Research Equity on October 24, 2024 and sell it today you would earn a total of  28.00  from holding Jpmorgan Research Equity or generate 1.95% return on investment over 90 days.

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

Bbh Intermediate Municipal  vs.  Jpmorgan Research Equity

Bbh Intermediate Mun

Risk-Adjusted Performance

1 of 100

Weak

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

Jpmorgan Research Equity

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Research Equity are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Jpmorgan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bbh Intermediate and Jpmorgan

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

The idea behind Bbh Intermediate Municipal and Jpmorgan Research Equity 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.