Correlation Between Jp Morgan and Eaton Vance

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

By analyzing existing cross correlation between Jp Morgan Smartretirement and Eaton Vance High, you can compare the effects of market volatilities on Jp Morgan and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jp Morgan and Eaton Vance.

Diversification Opportunities for Jp Morgan and Eaton Vance

0.38

Correlation Coefficient

Jp Morgan  Eaton Vance

Weak diversification

The 3 months correlation between JTSQX and Eaton is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Jp Morgan Smartretirement and Eaton Vance High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance High 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 Smartretirement are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance High has no effect on the direction of Jp Morgan i.e., Jp Morgan and Eaton Vance go up and down completely randomly.

Pair Corralation between Jp Morgan and Eaton Vance

Assuming the 90 days horizon Jp Morgan is expected to generate 1.11 times less return on investment than Eaton Vance. In addition to that, Jp Morgan is 2.89 times more volatile than Eaton Vance High. It trades about 0.02 of its total potential returns per unit of risk. Eaton Vance High is currently generating about 0.08 per unit of volatility. If you would invest  418.00  in Eaton Vance High on October 24, 2024 and sell it today you would earn a total of  6.00  from holding Eaton Vance High or generate 1.44% return on investment over 90 days.

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

Jp Morgan Smartretirement  vs.  Eaton Vance High

Jp Morgan Smartretirement

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jp Morgan Smartretirement are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jp Morgan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance High

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance High are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jp Morgan and Eaton Vance

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

The idea behind Jp Morgan Smartretirement and Eaton Vance High 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.