Correlation Between Jp Morgan and Growth Fund

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

Diversification Opportunities for Jp Morgan and Growth Fund

0.83

Correlation Coefficient

Jp Morgan  Growth Fund

Very poor diversification

The 3 months correlation between JTSQX and Growth is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Jp Morgan Smartretirement and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Jp Morgan i.e., Jp Morgan and Growth Fund go up and down completely randomly.

Pair Corralation between Jp Morgan and Growth Fund

Assuming the 90 days horizon Jp Morgan is expected to generate 1.35 times less return on investment than Growth Fund. But when comparing it to its historical volatility, Jp Morgan Smartretirement is 1.36 times less risky than Growth Fund. It trades about 0.08 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  7,342  in Growth Fund Of on October 23, 2024 and sell it today you would earn a total of  99.00  from holding Growth Fund Of or generate 1.35% return on investment over 90 days.

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

Jp Morgan Smartretirement  vs.  Growth Fund Of

Jp Morgan Smartretirement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jp Morgan Smartretirement has generated negative risk-adjusted returns adding no value to fund investors. 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.

Growth Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Growth Fund Of has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Growth Fund 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 Growth Fund

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

The idea behind Jp Morgan Smartretirement and Growth Fund Of 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.