Correlation Between Jpmorgan Small and Hartford Small

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

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

Diversification Opportunities for Jpmorgan Small and Hartford Small

0.77

Correlation Coefficient

Jpmorgan Small  Hartford Small

Poor diversification

The 3 months correlation between JPMORGAN and Hartford is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Small Cap and Hartford Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small Pany and Jpmorgan Small 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 Small Cap are associated (or correlated) with Hartford Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small Pany has no effect on the direction of Jpmorgan Small i.e., Jpmorgan Small and Hartford Small go up and down completely randomly.

Pair Corralation between Jpmorgan Small and Hartford Small

Assuming the 90 days horizon Jpmorgan Small Cap is expected to under-perform the Hartford Small. In addition to that, Jpmorgan Small is 1.52 times more volatile than Hartford Small Pany. It trades about -0.32 of its total potential returns per unit of risk. Hartford Small Pany is currently generating about -0.18 per unit of volatility. If you would invest  1,903  in Hartford Small Pany on October 10, 2024 and sell it today you would lose (90.00) from holding Hartford Small Pany or give up 4.73% of portfolio value over 90 days.

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

Jpmorgan Small Cap  vs.  Hartford Small Pany

Jpmorgan Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hartford Small Pany

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Small Pany are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hartford Small 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 Small and Hartford Small

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

The idea behind Jpmorgan Small Cap and Hartford Small Pany 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.