Correlation Between The Hartford and Jpmorgan Hedged

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

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

Diversification Opportunities for The Hartford and Jpmorgan Hedged

-0.22

Correlation Coefficient

The Hartford  Jpmorgan Hedged

Very good diversification

The 3 months correlation between The and Jpmorgan is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Healthcare 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 The Hartford 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 The Hartford Healthcare 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 The Hartford i.e., The Hartford and Jpmorgan Hedged go up and down completely randomly.

Pair Corralation between The Hartford and Jpmorgan Hedged

Assuming the 90 days horizon The Hartford is expected to generate 6.06 times less return on investment than Jpmorgan Hedged. In addition to that, The Hartford is 1.62 times more volatile than Jpmorgan Hedged Equity. It trades about 0.01 of its total potential returns per unit of risk. Jpmorgan Hedged Equity is currently generating about 0.13 per unit of volatility. If you would invest  1,422  in Jpmorgan Hedged Equity on October 20, 2024 and sell it today you would earn a total of  537.00  from holding Jpmorgan Hedged Equity or generate 37.76% return on investment over 90 days.

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

The Hartford Healthcare  vs.  Jpmorgan Hedged Equity

The Hartford Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jpmorgan Hedged Equity

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Hedged Equity are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic 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 The Hartford and Jpmorgan Hedged

The main advantage of trading using opposite The Hartford and Jpmorgan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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 The Hartford Healthcare 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.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.