Correlation Between Jpmorgan Strategic and Fpa Flexible

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

By analyzing existing cross correlation between Jpmorgan Strategic Income and Fpa Flexible Fixed, you can compare the effects of market volatilities on Jpmorgan Strategic and Fpa Flexible 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 Strategic with a short position of Fpa Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Strategic and Fpa Flexible.

Diversification Opportunities for Jpmorgan Strategic and Fpa Flexible

-0.71

Correlation Coefficient

Jpmorgan Strategic  Fpa Flexible

Pay attention - limited upside

The 3 months correlation between Jpmorgan and Fpa is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Strategic Income and Fpa Flexible Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fpa Flexible Fixed and Jpmorgan Strategic 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 Strategic Income are associated (or correlated) with Fpa Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fpa Flexible Fixed has no effect on the direction of Jpmorgan Strategic i.e., Jpmorgan Strategic and Fpa Flexible go up and down completely randomly.

Pair Corralation between Jpmorgan Strategic and Fpa Flexible

Assuming the 90 days horizon Jpmorgan Strategic Income is expected to generate 0.31 times more return on investment than Fpa Flexible. However, Jpmorgan Strategic Income is 3.21 times less risky than Fpa Flexible. It trades about 0.15 of its potential returns per unit of risk. Fpa Flexible Fixed is currently generating about -0.01 per unit of risk. If you would invest  1,124  in Jpmorgan Strategic Income on September 2, 2024 and sell it today you would earn a total of  6.00  from holding Jpmorgan Strategic Income or generate 0.53% return on investment over 90 days.

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

Jpmorgan Strategic Income  vs.  Fpa Flexible Fixed

Jpmorgan Strategic Income

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Strategic Income are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Jpmorgan Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fpa Flexible Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fpa Flexible Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Fpa Flexible 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 Strategic and Fpa Flexible

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

The idea behind Jpmorgan Strategic Income and Fpa Flexible Fixed 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.