Correlation Between Jhancock Diversified and Jpmorgan Smartretirement

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

By analyzing existing cross correlation between Jhancock Diversified Macro and Jpmorgan Smartretirement 2035, you can compare the effects of market volatilities on Jhancock Diversified and Jpmorgan Smartretirement 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 Jhancock Diversified with a short position of Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Jpmorgan Smartretirement.

Diversification Opportunities for Jhancock Diversified and Jpmorgan Smartretirement

-0.4

Correlation Coefficient

Jhancock Diversified  Jpmorgan Smartretirement

Very good diversification

The 3 months correlation between Jhancock and Jpmorgan is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and Jpmorgan Smartretirement 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement and Jhancock Diversified 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 Jhancock Diversified Macro are associated (or correlated) with Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Jpmorgan Smartretirement go up and down completely randomly.

Pair Corralation between Jhancock Diversified and Jpmorgan Smartretirement

Assuming the 90 days horizon Jhancock Diversified Macro is expected to under-perform the Jpmorgan Smartretirement. In addition to that, Jhancock Diversified is 1.02 times more volatile than Jpmorgan Smartretirement 2035. It trades about -0.03 of its total potential returns per unit of risk. Jpmorgan Smartretirement 2035 is currently generating about 0.05 per unit of volatility. If you would invest  1,962  in Jpmorgan Smartretirement 2035 on October 26, 2024 and sell it today you would earn a total of  73.00  from holding Jpmorgan Smartretirement 2035 or generate 3.72% return on investment over 90 days.

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

Jhancock Diversified Macro  vs.  Jpmorgan Smartretirement 2035

Jhancock Diversified

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Diversified Macro are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jhancock Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan Smartretirement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Smartretirement 2035 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.

Pair Trading with Jhancock Diversified and Jpmorgan Smartretirement

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

The idea behind Jhancock Diversified Macro and Jpmorgan Smartretirement 2035 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.