Correlation Between Calvert Moderate and Jp Morgan

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

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

Diversification Opportunities for Calvert Moderate and Jp Morgan

0.9

Correlation Coefficient

Calvert Moderate  Jp Morgan

Almost no diversification

The 3 months correlation between Calvert and JTSQX is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation 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 Calvert Moderate 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 Calvert Moderate Allocation 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 Calvert Moderate i.e., Calvert Moderate and Jp Morgan go up and down completely randomly.

Pair Corralation between Calvert Moderate and Jp Morgan

Assuming the 90 days horizon Calvert Moderate is expected to generate 1.52 times less return on investment than Jp Morgan. But when comparing it to its historical volatility, Calvert Moderate Allocation is 1.43 times less risky than Jp Morgan. It trades about 0.12 of its potential returns per unit of risk. Jp Morgan Smartretirement is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,274  in Jp Morgan Smartretirement on September 2, 2024 and sell it today you would earn a total of  118.00  from holding Jp Morgan Smartretirement or generate 5.19% return on investment over 90 days.

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

Calvert Moderate Allocation  vs.  Jp Morgan Smartretirement

Calvert Moderate All

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Moderate Allocation are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Calvert Moderate 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

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jp Morgan Smartretirement are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. 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 Calvert Moderate and Jp Morgan

The main advantage of trading using opposite Calvert Moderate and Jp Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate 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 Calvert Moderate Allocation 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.