Correlation Between Jpmorgan Strategic and Dunham Appreciation

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

Diversification Opportunities for Jpmorgan Strategic and Dunham Appreciation

0.88

Correlation Coefficient

Jpmorgan Strategic  Dunham Appreciation

Very poor diversification

The 3 months correlation between Jpmorgan and Dunham is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Strategic Income and Dunham Appreciation Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Appreciation 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 Dunham Appreciation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Appreciation has no effect on the direction of Jpmorgan Strategic i.e., Jpmorgan Strategic and Dunham Appreciation go up and down completely randomly.

Pair Corralation between Jpmorgan Strategic and Dunham Appreciation

Assuming the 90 days horizon Jpmorgan Strategic Income is expected to generate 0.56 times more return on investment than Dunham Appreciation. However, Jpmorgan Strategic Income is 1.8 times less risky than Dunham Appreciation. It trades about 0.34 of its potential returns per unit of risk. Dunham Appreciation Income is currently generating about 0.12 per unit of risk. If you would invest  1,035  in Jpmorgan Strategic Income on December 2, 2024 and sell it today you would earn a total of  110.00  from holding Jpmorgan Strategic Income or generate 10.63% return on investment over 90 days.

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

Jpmorgan Strategic Income  vs.  Dunham Appreciation Income

Jpmorgan Strategic Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Strategic Income are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dunham Appreciation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Appreciation Income are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Dunham Appreciation 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 Dunham Appreciation

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

The idea behind Jpmorgan Strategic Income and Dunham Appreciation Income 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.