Correlation Between Jpmorgan Value and Fidelity Zero

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

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

Diversification Opportunities for Jpmorgan Value and Fidelity Zero

0.94

Correlation Coefficient

Jpmorgan Value  Fidelity Zero

Almost no diversification

The 3 months correlation between Jpmorgan and Fidelity is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Value Advantage and Fidelity Zero Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Zero Total and Jpmorgan Value 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 Value Advantage are associated (or correlated) with Fidelity Zero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Zero Total has no effect on the direction of Jpmorgan Value i.e., Jpmorgan Value and Fidelity Zero go up and down completely randomly.

Pair Corralation between Jpmorgan Value and Fidelity Zero

Assuming the 90 days horizon Jpmorgan Value is expected to generate 1.42 times less return on investment than Fidelity Zero. In addition to that, Jpmorgan Value is 1.05 times more volatile than Fidelity Zero Total. It trades about 0.18 of its total potential returns per unit of risk. Fidelity Zero Total is currently generating about 0.26 per unit of volatility. If you would invest  1,901  in Fidelity Zero Total on September 7, 2024 and sell it today you would earn a total of  227.00  from holding Fidelity Zero Total or generate 11.94% return on investment over 90 days.

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

Jpmorgan Value Advantage  vs.  Fidelity Zero Total

Jpmorgan Value Advantage

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Value Advantage are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Jpmorgan Value may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity Zero Total

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Zero Total are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Zero may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jpmorgan Value and Fidelity Zero

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

The idea behind Jpmorgan Value Advantage and Fidelity Zero Total 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.