Correlation Between Jp Morgan and Touchstone Focused

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

Diversification Opportunities for Jp Morgan and Touchstone Focused

0.78

Correlation Coefficient

Jp Morgan  Touchstone Focused

Poor diversification

The 3 months correlation between JTSQX and Touchstone is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jp Morgan Smartretirement and Touchstone Focused Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Focused 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 Touchstone Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Focused has no effect on the direction of Jp Morgan i.e., Jp Morgan and Touchstone Focused go up and down completely randomly.

Pair Corralation between Jp Morgan and Touchstone Focused

Assuming the 90 days horizon Jp Morgan Smartretirement is expected to under-perform the Touchstone Focused. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jp Morgan Smartretirement is 1.09 times less risky than Touchstone Focused. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Touchstone Focused Fund is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  7,574  in Touchstone Focused Fund on September 23, 2024 and sell it today you would lose (36.00) from holding Touchstone Focused Fund or give up 0.48% of portfolio value over 90 days.

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

Jp Morgan Smartretirement  vs.  Touchstone Focused Fund

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.

Touchstone Focused

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Touchstone Focused Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Touchstone Focused 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 Touchstone Focused

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

The idea behind Jp Morgan Smartretirement and Touchstone Focused Fund 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.