Correlation Between Jpmorgan Mid and Adler Value

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

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

Diversification Opportunities for Jpmorgan Mid and Adler Value

0.66

Correlation Coefficient

Jpmorgan Mid  Adler Value

Poor diversification

The 3 months correlation between Jpmorgan and Adler is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Mid Cap and Adler Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adler Value Fund and Jpmorgan Mid 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 Mid Cap are associated (or correlated) with Adler Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adler Value Fund has no effect on the direction of Jpmorgan Mid i.e., Jpmorgan Mid and Adler Value go up and down completely randomly.

Pair Corralation between Jpmorgan Mid and Adler Value

Assuming the 90 days horizon Jpmorgan Mid Cap is expected to under-perform the Adler Value. In addition to that, Jpmorgan Mid is 1.87 times more volatile than Adler Value Fund. It trades about -0.16 of its total potential returns per unit of risk. Adler Value Fund is currently generating about -0.02 per unit of volatility. If you would invest  2,897  in Adler Value Fund on December 1, 2024 and sell it today you would lose (30.00) from holding Adler Value Fund or give up 1.04% of portfolio value over 90 days.

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

Jpmorgan Mid Cap  vs.  Adler Value Fund

Jpmorgan Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jpmorgan Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Adler Value Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adler Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Adler Value 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 Mid and Adler Value

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

The idea behind Jpmorgan Mid Cap and Adler Value Fund 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.