Correlation Between Jpmorgan Mid and Thrivent Natural

Can any of the company-specific risk be diversified away by investing in both Jpmorgan Mid and Thrivent Natural 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 Thrivent Natural 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 Thrivent Natural Resources, you can compare the effects of market volatilities on Jpmorgan Mid and Thrivent Natural 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 Thrivent Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Mid and Thrivent Natural.

Diversification Opportunities for Jpmorgan Mid and Thrivent Natural

-0.31

Correlation Coefficient

Jpmorgan Mid  Thrivent Natural

Very good diversification

The 3 months correlation between Jpmorgan and Thrivent is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Mid Cap and Thrivent Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Natural Res 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 Thrivent Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Natural Res has no effect on the direction of Jpmorgan Mid i.e., Jpmorgan Mid and Thrivent Natural go up and down completely randomly.

Pair Corralation between Jpmorgan Mid and Thrivent Natural

Assuming the 90 days horizon Jpmorgan Mid Cap is expected to under-perform the Thrivent Natural. In addition to that, Jpmorgan Mid is 7.66 times more volatile than Thrivent Natural Resources. It trades about -0.05 of its total potential returns per unit of risk. Thrivent Natural Resources is currently generating about 0.19 per unit of volatility. If you would invest  992.00  in Thrivent Natural Resources on December 30, 2024 and sell it today you would earn a total of  13.00  from holding Thrivent Natural Resources or generate 1.31% return on investment over 90 days.

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

Jpmorgan Mid Cap  vs.  Thrivent Natural Resources

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 fairly strong basic indicators, Jpmorgan Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thrivent Natural Res

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Natural Resources are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Thrivent Natural 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 Thrivent Natural

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

The idea behind Jpmorgan Mid Cap and Thrivent Natural Resources 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.