Correlation Between Barloworld and Jpmorgan Smartretirement

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

By analyzing existing cross correlation between Barloworld Ltd ADR and Jpmorgan Smartretirement Income, you can compare the effects of market volatilities on Barloworld and Jpmorgan Smartretirement 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 Barloworld with a short position of Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Jpmorgan Smartretirement.

Diversification Opportunities for Barloworld and Jpmorgan Smartretirement

-0.27

Correlation Coefficient

Barloworld  Jpmorgan Smartretirement

Very good diversification

The 3 months correlation between Barloworld and Jpmorgan is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Jpmorgan Smartretirement Incom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement and Barloworld 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 Barloworld Ltd ADR are associated (or correlated) with Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of Barloworld i.e., Barloworld and Jpmorgan Smartretirement go up and down completely randomly.

Pair Corralation between Barloworld and Jpmorgan Smartretirement

Assuming the 90 days horizon Barloworld Ltd ADR is expected to under-perform the Jpmorgan Smartretirement. In addition to that, Barloworld is 12.43 times more volatile than Jpmorgan Smartretirement Income. It trades about -0.05 of its total potential returns per unit of risk. Jpmorgan Smartretirement Income is currently generating about 0.03 per unit of volatility. If you would invest  1,572  in Jpmorgan Smartretirement Income on November 29, 2024 and sell it today you would earn a total of  9.00  from holding Jpmorgan Smartretirement Income or generate 0.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.19%
Values	Daily Returns

Barloworld Ltd ADR  vs.  Jpmorgan Smartretirement Incom

Barloworld ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Barloworld Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Jpmorgan Smartretirement

Risk-Adjusted Performance

Weak

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

Pair Trading with Barloworld and Jpmorgan Smartretirement

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

The idea behind Barloworld Ltd ADR and Jpmorgan Smartretirement Income 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.