Correlation Between Jpmorgan Smartretirement and Alger Funds

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

By analyzing existing cross correlation between Jpmorgan Smartretirement 2060 and Alger Funds Mid, you can compare the effects of market volatilities on Jpmorgan Smartretirement and Alger Funds 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 Smartretirement with a short position of Alger Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement and Alger Funds.

Diversification Opportunities for Jpmorgan Smartretirement and Alger Funds

0.32

Correlation Coefficient

Jpmorgan Smartretirement  Alger Funds

Weak diversification

The 3 months correlation between Jpmorgan and Alger is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement 2060 and Alger Funds Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Funds Mid and Jpmorgan Smartretirement 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 Smartretirement 2060 are associated (or correlated) with Alger Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Funds Mid has no effect on the direction of Jpmorgan Smartretirement i.e., Jpmorgan Smartretirement and Alger Funds go up and down completely randomly.

Pair Corralation between Jpmorgan Smartretirement and Alger Funds

Assuming the 90 days horizon Jpmorgan Smartretirement is expected to generate 2.1 times less return on investment than Alger Funds. But when comparing it to its historical volatility, Jpmorgan Smartretirement 2060 is 1.88 times less risky than Alger Funds. It trades about 0.08 of its potential returns per unit of risk. Alger Funds Mid is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,858  in Alger Funds Mid on October 22, 2024 and sell it today you would earn a total of  38.00  from holding Alger Funds Mid or generate 2.05% return on investment over 90 days.

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

Jpmorgan Smartretirement 2060  vs.  Alger Funds Mid

Jpmorgan Smartretirement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Smartretirement 2060 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan Smartretirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alger Funds Mid

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Funds Mid are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alger Funds showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jpmorgan Smartretirement and Alger Funds

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

The idea behind Jpmorgan Smartretirement 2060 and Alger Funds Mid 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.