Correlation Between Fidelity Managed and Jpmorgan Mid

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

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

Diversification Opportunities for Fidelity Managed and Jpmorgan Mid

0.4

Correlation Coefficient

Fidelity Managed  Jpmorgan Mid

Very weak diversification

The 3 months correlation between Fidelity and Jpmorgan is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Managed Retirement and Jpmorgan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Mid Cap and Fidelity Managed 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 Fidelity Managed Retirement are associated (or correlated) with Jpmorgan Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Mid Cap has no effect on the direction of Fidelity Managed i.e., Fidelity Managed and Jpmorgan Mid go up and down completely randomly.

Pair Corralation between Fidelity Managed and Jpmorgan Mid

Assuming the 90 days horizon Fidelity Managed Retirement is expected to under-perform the Jpmorgan Mid. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Managed Retirement is 4.21 times less risky than Jpmorgan Mid. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Jpmorgan Mid Cap is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  4,034  in Jpmorgan Mid Cap on October 3, 2024 and sell it today you would lose (109.00) from holding Jpmorgan Mid Cap or give up 2.7% of portfolio value over 90 days.

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

Fidelity Managed Retirement  vs.  Jpmorgan Mid Cap

Fidelity Managed Ret

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jpmorgan Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Fidelity Managed and Jpmorgan Mid

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

The idea behind Fidelity Managed Retirement and Jpmorgan Mid Cap 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.