Correlation Between Jp Morgan and Great-west Lifetime

Can any of the company-specific risk be diversified away by investing in both Jp Morgan and Great-west Lifetime 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 Great-west Lifetime 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 Great West Lifetime 2045, you can compare the effects of market volatilities on Jp Morgan and Great-west Lifetime 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 Great-west Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jp Morgan and Great-west Lifetime.

Diversification Opportunities for Jp Morgan and Great-west Lifetime

0.55

Correlation Coefficient

Jp Morgan  Great-west Lifetime

Very weak diversification

The 3 months correlation between JTSQX and Great-west is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Jp Morgan Smartretirement and Great West Lifetime 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifetime 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 Great-west Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifetime has no effect on the direction of Jp Morgan i.e., Jp Morgan and Great-west Lifetime go up and down completely randomly.

Pair Corralation between Jp Morgan and Great-west Lifetime

Assuming the 90 days horizon Jp Morgan Smartretirement is expected to generate 0.87 times more return on investment than Great-west Lifetime. However, Jp Morgan Smartretirement is 1.15 times less risky than Great-west Lifetime. It trades about 0.14 of its potential returns per unit of risk. Great West Lifetime 2045 is currently generating about 0.03 per unit of risk. If you would invest  2,264  in Jp Morgan Smartretirement on September 5, 2024 and sell it today you would earn a total of  128.00  from holding Jp Morgan Smartretirement or generate 5.65% return on investment over 90 days.

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

Jp Morgan Smartretirement  vs.  Great West Lifetime 2045

Jp Morgan Smartretirement

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jp Morgan Smartretirement are ranked lower than 11 (%) 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.

Great West Lifetime

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Lifetime 2045 are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Great-west Lifetime 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 Great-west Lifetime

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

The idea behind Jp Morgan Smartretirement and Great West Lifetime 2045 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.