Correlation Between Jpmorgan Large and Jpmorgan Value

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

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

Diversification Opportunities for Jpmorgan Large and Jpmorgan Value

0.88

Correlation Coefficient

Jpmorgan Large  Jpmorgan Value

Very poor diversification

The 3 months correlation between Jpmorgan and Jpmorgan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Large Cap and Jpmorgan Value Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Value Advantage and Jpmorgan Large 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 Large Cap are associated (or correlated) with Jpmorgan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Value Advantage has no effect on the direction of Jpmorgan Large i.e., Jpmorgan Large and Jpmorgan Value go up and down completely randomly.

Pair Corralation between Jpmorgan Large and Jpmorgan Value

Assuming the 90 days horizon Jpmorgan Large Cap is expected to generate 0.91 times more return on investment than Jpmorgan Value. However, Jpmorgan Large Cap is 1.09 times less risky than Jpmorgan Value. It trades about 0.07 of its potential returns per unit of risk. Jpmorgan Value Advantage is currently generating about 0.04 per unit of risk. If you would invest  1,738  in Jpmorgan Large Cap on September 14, 2024 and sell it today you would earn a total of  534.00  from holding Jpmorgan Large Cap or generate 30.72% return on investment over 90 days.

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

Jpmorgan Large Cap  vs.  Jpmorgan Value Advantage

Jpmorgan Large Cap

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Large Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Jpmorgan Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jpmorgan Value Advantage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Value Advantage has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan Value 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 Large and Jpmorgan Value

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

The idea behind Jpmorgan Large Cap and Jpmorgan Value Advantage 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.