Correlation Between Jpmorgan Diversified and Jpmorgan Smartretirement

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

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

Diversification Opportunities for Jpmorgan Diversified and Jpmorgan Smartretirement

0.91

Correlation Coefficient

Jpmorgan Diversified  Jpmorgan Smartretirement

Almost no diversification

The 3 months correlation between Jpmorgan and Jpmorgan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Diversified Fund and Jpmorgan Smartretirement Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement and Jpmorgan Diversified 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 Diversified Fund are associated (or correlated) with Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of Jpmorgan Diversified i.e., Jpmorgan Diversified and Jpmorgan Smartretirement go up and down completely randomly.

Pair Corralation between Jpmorgan Diversified and Jpmorgan Smartretirement

Assuming the 90 days horizon Jpmorgan Diversified Fund is expected to under-perform the Jpmorgan Smartretirement. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jpmorgan Diversified Fund is 1.19 times less risky than Jpmorgan Smartretirement. The mutual fund trades about -0.33 of its potential returns per unit of risk. The Jpmorgan Smartretirement Blend is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest  2,726  in Jpmorgan Smartretirement Blend on October 11, 2024 and sell it today you would lose (123.00) from holding Jpmorgan Smartretirement Blend or give up 4.51% of portfolio value over 90 days.

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

Jpmorgan Diversified Fund  vs.  Jpmorgan Smartretirement Blend

Jpmorgan Diversified

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jpmorgan Smartretirement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Smartretirement Blend has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan Smartretirement 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 Diversified and Jpmorgan Smartretirement

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

The idea behind Jpmorgan Diversified Fund and Jpmorgan Smartretirement Blend 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.