Correlation Between Federated Short-term and Jpmorgan High
Can any of the company-specific risk be diversified away by investing in both Federated Short-term and Jpmorgan High 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 Federated Short-term and Jpmorgan High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Short Term Income and Jpmorgan High Yield, you can compare the effects of market volatilities on Federated Short-term and Jpmorgan High 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 Federated Short-term with a short position of Jpmorgan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Short-term and Jpmorgan High.
Diversification Opportunities for Federated Short-term and Jpmorgan High
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and JPMORGAN is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Federated Short Term Income and Jpmorgan High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan High Yield and Federated Short-term 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 Federated Short Term Income are associated (or correlated) with Jpmorgan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan High Yield has no effect on the direction of Federated Short-term i.e., Federated Short-term and Jpmorgan High go up and down completely randomly.
Pair Corralation between Federated Short-term and Jpmorgan High
Assuming the 90 days horizon Federated Short Term Income is expected to generate 0.63 times more return on investment than Jpmorgan High. However, Federated Short Term Income is 1.59 times less risky than Jpmorgan High. It trades about 0.32 of its potential returns per unit of risk. Jpmorgan High Yield is currently generating about 0.1 per unit of risk. If you would invest 848.00 in Federated Short Term Income on December 4, 2024 and sell it today you would earn a total of 5.00 from holding Federated Short Term Income or generate 0.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Federated Short Term Income vs. Jpmorgan High Yield
Performance |
Timeline |
Federated Short Term |
Jpmorgan High Yield |
Federated Short-term and Jpmorgan High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Short-term and Jpmorgan High
The main advantage of trading using opposite Federated Short-term and Jpmorgan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Short-term position performs unexpectedly, Jpmorgan High 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 High will offset losses from the drop in Jpmorgan High's long position.Federated Short-term vs. Seix Govt Sec | Federated Short-term vs. Barings Active Short | Federated Short-term vs. John Hancock Variable | Federated Short-term vs. Alpine Ultra Short |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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