Correlation Between Jpmorgan Research and American Beacon

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

By analyzing existing cross correlation between Jpmorgan Research Market and American Beacon Ssi, you can compare the effects of market volatilities on Jpmorgan Research and American Beacon 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 Research with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Research and American Beacon.

Diversification Opportunities for Jpmorgan Research and American Beacon

0.48

Correlation Coefficient

Jpmorgan Research  American Beacon

Very weak diversification

The 3 months correlation between Jpmorgan and American is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Research Market and American Beacon Ssi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Ssi and Jpmorgan Research 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 Research Market are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Ssi has no effect on the direction of Jpmorgan Research i.e., Jpmorgan Research and American Beacon go up and down completely randomly.

Pair Corralation between Jpmorgan Research and American Beacon

Assuming the 90 days horizon Jpmorgan Research Market is expected to under-perform the American Beacon. In addition to that, Jpmorgan Research is 6.0 times more volatile than American Beacon Ssi. It trades about -0.14 of its total potential returns per unit of risk. American Beacon Ssi is currently generating about 0.22 per unit of volatility. If you would invest  992.00  in American Beacon Ssi on September 27, 2024 and sell it today you would earn a total of  9.00  from holding American Beacon Ssi or generate 0.91% return on investment over 90 days.

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

Jpmorgan Research Market  vs.  American Beacon Ssi

Jpmorgan Research Market

Risk-Adjusted Performance

0 of 100

Very Weak

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

American Beacon Ssi

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in American Beacon Ssi are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, American Beacon 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 Research and American Beacon

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

The idea behind Jpmorgan Research Market and American Beacon Ssi 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.