Correlation Between Jpmorgan Hedged and Brinker Capital

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

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

Diversification Opportunities for Jpmorgan Hedged and Brinker Capital

0.9

Correlation Coefficient

Jpmorgan Hedged  Brinker Capital

Almost no diversification

The 3 months correlation between Jpmorgan and Brinker is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Hedged Equity and Brinker Capital Destinations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinker Capital Dest and Jpmorgan Hedged 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 Hedged Equity are associated (or correlated) with Brinker Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinker Capital Dest has no effect on the direction of Jpmorgan Hedged i.e., Jpmorgan Hedged and Brinker Capital go up and down completely randomly.

Pair Corralation between Jpmorgan Hedged and Brinker Capital

Assuming the 90 days horizon Jpmorgan Hedged Equity is expected to generate 0.82 times more return on investment than Brinker Capital. However, Jpmorgan Hedged Equity is 1.22 times less risky than Brinker Capital. It trades about -0.05 of its potential returns per unit of risk. Brinker Capital Destinations is currently generating about -0.09 per unit of risk. If you would invest  1,867  in Jpmorgan Hedged Equity on December 27, 2024 and sell it today you would lose (37.00) from holding Jpmorgan Hedged Equity or give up 1.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.36%
Values	Daily Returns

Jpmorgan Hedged Equity  vs.  Brinker Capital Destinations

Jpmorgan Hedged Equity

Risk-Adjusted Performance

Very Weak

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

Brinker Capital Dest

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brinker Capital Destinations has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Brinker Capital 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 Hedged and Brinker Capital

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

The idea behind Jpmorgan Hedged Equity and Brinker Capital Destinations 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.