Correlation Between Jpmorgan Equity and Ab Large

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

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

Diversification Opportunities for Jpmorgan Equity and Ab Large

0.77

Correlation Coefficient

Jpmorgan Equity  Ab Large

Poor diversification

The 3 months correlation between Jpmorgan and APGAX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Income and Ab Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Large Cap and Jpmorgan Equity 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 Jpmorgan Equity Income are associated (or correlated) with Ab Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Large Cap has no effect on the direction of Jpmorgan Equity i.e., Jpmorgan Equity and Ab Large go up and down completely randomly.

Pair Corralation between Jpmorgan Equity and Ab Large

Assuming the 90 days horizon Jpmorgan Equity Income is expected to under-perform the Ab Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jpmorgan Equity Income is 1.26 times less risky than Ab Large. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Ab Large Cap is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  9,905  in Ab Large Cap on September 30, 2024 and sell it today you would lose (130.00) from holding Ab Large Cap or give up 1.31% of portfolio value over 90 days.

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

Jpmorgan Equity Income  vs.  Ab Large Cap

Jpmorgan Equity Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Equity Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Ab Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jpmorgan Equity and Ab Large

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

The idea behind Jpmorgan Equity Income and Ab Large 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.