Correlation Between Chartwell Short and Jpmorgan Hedged

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

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

Diversification Opportunities for Chartwell Short and Jpmorgan Hedged

0.51

Correlation Coefficient

Chartwell Short  Jpmorgan Hedged

Very weak diversification

The 3 months correlation between Chartwell and Jpmorgan is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Short Duration and Jpmorgan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Hedged Equity and Chartwell Short 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 Chartwell Short Duration are associated (or correlated) with Jpmorgan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Hedged Equity has no effect on the direction of Chartwell Short i.e., Chartwell Short and Jpmorgan Hedged go up and down completely randomly.

Pair Corralation between Chartwell Short and Jpmorgan Hedged

Assuming the 90 days horizon Chartwell Short is expected to generate 2.29 times less return on investment than Jpmorgan Hedged. But when comparing it to its historical volatility, Chartwell Short Duration is 3.2 times less risky than Jpmorgan Hedged. It trades about 0.23 of its potential returns per unit of risk. Jpmorgan Hedged Equity is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,520  in Jpmorgan Hedged Equity on October 5, 2024 and sell it today you would earn a total of  336.00  from holding Jpmorgan Hedged Equity or generate 22.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.68%
Values	Daily Returns

Chartwell Short Duration  vs.  Jpmorgan Hedged Equity

Chartwell Short Duration

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jpmorgan Hedged Equity

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Hedged Equity are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Jpmorgan Hedged is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chartwell Short and Jpmorgan Hedged

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

The idea behind Chartwell Short Duration and Jpmorgan Hedged 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.