Correlation Between Jpmorgan Strategic and Ultra Short

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

Diversification Opportunities for Jpmorgan Strategic and Ultra Short

0.9

Correlation Coefficient

Jpmorgan Strategic  Ultra Short

Almost no diversification

The 3 months correlation between Jpmorgan and Ultra is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Strategic Income and Ultra Short Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Short Income 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 Ultra Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Short Income has no effect on the direction of Jpmorgan Strategic i.e., Jpmorgan Strategic and Ultra Short go up and down completely randomly.

Pair Corralation between Jpmorgan Strategic and Ultra Short

Assuming the 90 days horizon Jpmorgan Strategic is expected to generate 1.24 times less return on investment than Ultra Short. But when comparing it to its historical volatility, Jpmorgan Strategic Income is 1.81 times less risky than Ultra Short. It trades about 0.37 of its potential returns per unit of risk. Ultra Short Income is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  877.00  in Ultra Short Income on October 25, 2024 and sell it today you would earn a total of  122.00  from holding Ultra Short Income or generate 13.91% return on investment over 90 days.

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

Jpmorgan Strategic Income  vs.  Ultra Short Income

Jpmorgan Strategic Income

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Strategic Income are ranked lower than 26 (%) 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.

Ultra Short Income

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Short Income are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Ultra Short 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 Ultra Short

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

The idea behind Jpmorgan Strategic Income and Ultra Short 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.