Correlation Between Jpmorgan and Frost Total

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

By analyzing existing cross correlation between Jpmorgan Equity Fund and Frost Total Return, you can compare the effects of market volatilities on Jpmorgan and Frost Total 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 with a short position of Frost Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan and Frost Total.

Diversification Opportunities for Jpmorgan and Frost Total

0.17

Correlation Coefficient

Jpmorgan  Frost Total

Average diversification

The 3 months correlation between Jpmorgan and Frost is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Fund and Frost Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Total Return and Jpmorgan 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 Equity Fund are associated (or correlated) with Frost Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Total Return has no effect on the direction of Jpmorgan i.e., Jpmorgan and Frost Total go up and down completely randomly.

Pair Corralation between Jpmorgan and Frost Total

Assuming the 90 days horizon Jpmorgan Equity Fund is expected to generate 3.27 times more return on investment than Frost Total. However, Jpmorgan is 3.27 times more volatile than Frost Total Return. It trades about 0.08 of its potential returns per unit of risk. Frost Total Return is currently generating about 0.11 per unit of risk. If you would invest  1,745  in Jpmorgan Equity Fund on December 5, 2024 and sell it today you would earn a total of  663.00  from holding Jpmorgan Equity Fund or generate 37.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Jpmorgan Equity Fund  vs.  Frost Total Return

Jpmorgan Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jpmorgan Equity Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Frost Total Return

Risk-Adjusted Performance

Modest

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

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

The idea behind Jpmorgan Equity Fund and Frost Total Return 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.