Correlation Between Jpmorgan Short and Short-term Fund

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

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

Diversification Opportunities for Jpmorgan Short and Short-term Fund

0.93

Correlation Coefficient

Jpmorgan Short  Short-term Fund

Almost no diversification

The 3 months correlation between Jpmorgan and Short-term is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Short Duration and Short Term Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Fund and Jpmorgan 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 Jpmorgan Short Duration are associated (or correlated) with Short-term Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Fund has no effect on the direction of Jpmorgan Short i.e., Jpmorgan Short and Short-term Fund go up and down completely randomly.

Pair Corralation between Jpmorgan Short and Short-term Fund

Assuming the 90 days horizon Jpmorgan Short is expected to generate 1.04 times less return on investment than Short-term Fund. But when comparing it to its historical volatility, Jpmorgan Short Duration is 1.01 times less risky than Short-term Fund. It trades about 0.2 of its potential returns per unit of risk. Short Term Fund Institutional is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  956.00  in Short Term Fund Institutional on December 30, 2024 and sell it today you would earn a total of  12.00  from holding Short Term Fund Institutional or generate 1.26% return on investment over 90 days.

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

Jpmorgan Short Duration  vs.  Short Term Fund Institutional

Jpmorgan Short Duration

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Short Duration are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Short Term Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Short Term Fund Institutional are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Short-term Fund 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 Short and Short-term Fund

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

The idea behind Jpmorgan Short Duration and Short Term Fund Institutional 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.