Correlation Between Jpmorgan Income and Jpmorgan Value

Can any of the company-specific risk be diversified away by investing in both Jpmorgan Income 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 Income 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 Income Fund and Jpmorgan Value Advantage, you can compare the effects of market volatilities on Jpmorgan Income 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 Income with a short position of Jpmorgan Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Income and Jpmorgan Value.

Diversification Opportunities for Jpmorgan Income and Jpmorgan Value

-0.43

Correlation Coefficient

Jpmorgan Income  Jpmorgan Value

Very good diversification

The 3 months correlation between Jpmorgan and Jpmorgan is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Income Fund 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 Income 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 Income Fund 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 Income i.e., Jpmorgan Income and Jpmorgan Value go up and down completely randomly.

Pair Corralation between Jpmorgan Income and Jpmorgan Value

Assuming the 90 days horizon Jpmorgan Income Fund is expected to generate 0.29 times more return on investment than Jpmorgan Value. However, Jpmorgan Income Fund is 3.49 times less risky than Jpmorgan Value. It trades about 0.1 of its potential returns per unit of risk. Jpmorgan Value Advantage is currently generating about 0.02 per unit of risk. If you would invest  751.00  in Jpmorgan Income Fund on October 22, 2024 and sell it today you would earn a total of  100.00  from holding Jpmorgan Income Fund or generate 13.32% return on investment over 90 days.

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

Jpmorgan Income Fund  vs.  Jpmorgan Value Advantage

Jpmorgan Income

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Income Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Jpmorgan Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Jpmorgan Income and Jpmorgan Value

The main advantage of trading using opposite Jpmorgan Income and Jpmorgan Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Income 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 Income Fund 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.