Correlation Between JP Morgan and JPMorgan Core

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

By analyzing existing cross correlation between JP Morgan Exchange Traded and JPMorgan Core Plus, you can compare the effects of market volatilities on JP Morgan and JPMorgan Core 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 JP Morgan with a short position of JPMorgan Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of JP Morgan and JPMorgan Core.

Diversification Opportunities for JP Morgan and JPMorgan Core

0.97

Correlation Coefficient

JP Morgan  JPMorgan Core

Almost no diversification

The 3 months correlation between JPIE and JPMorgan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Exchange Traded and JPMorgan Core Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Core Plus and JP Morgan 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 JP Morgan Exchange Traded are associated (or correlated) with JPMorgan Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Core Plus has no effect on the direction of JP Morgan i.e., JP Morgan and JPMorgan Core go up and down completely randomly.

Pair Corralation between JP Morgan and JPMorgan Core

Given the investment horizon of 90 days JP Morgan is expected to generate 1.15 times less return on investment than JPMorgan Core. But when comparing it to its historical volatility, JP Morgan Exchange Traded is 2.36 times less risky than JPMorgan Core. It trades about 0.26 of its potential returns per unit of risk. JPMorgan Core Plus is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4,573  in JPMorgan Core Plus on December 28, 2024 and sell it today you would earn a total of  96.00  from holding JPMorgan Core Plus or generate 2.1% return on investment over 90 days.

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

JP Morgan Exchange Traded  vs.  JPMorgan Core Plus

JP Morgan Exchange

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JP Morgan Exchange Traded are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, JP Morgan is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

JPMorgan Core Plus

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Core Plus are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, JPMorgan Core is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JP Morgan and JPMorgan Core

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

The idea behind JP Morgan Exchange Traded and JPMorgan Core Plus 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.