Correlation Between Jpmorgan and Short Term

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

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

Diversification Opportunities for Jpmorgan and Short Term

-0.07

Correlation Coefficient

Jpmorgan  Short Term

Good diversification

The 3 months correlation between Jpmorgan and Short is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Fund and Short Term Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Fund and Jpmorgan 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 Equity Fund are associated (or correlated) with Short Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Fund has no effect on the direction of Jpmorgan i.e., Jpmorgan and Short Term go up and down completely randomly.

Pair Corralation between Jpmorgan and Short Term

Assuming the 90 days horizon Jpmorgan Equity Fund is expected to under-perform the Short Term. In addition to that, Jpmorgan is 71.53 times more volatile than Short Term Fund Institutional. It trades about -0.26 of its total potential returns per unit of risk. Short Term Fund Institutional is currently generating about 0.23 per unit of volatility. If you would invest  967.00  in Short Term Fund Institutional on October 10, 2024 and sell it today you would earn a total of  1.00  from holding Short Term Fund Institutional or generate 0.1% return on investment over 90 days.

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

Jpmorgan Equity Fund  vs.  Short Term Fund Institutional

Jpmorgan Equity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Short Term Fund

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Short Term Fund Institutional are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Short Term 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 and Short Term

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

The idea behind Jpmorgan Equity Fund and Short Term Fund Institutional 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.