Correlation Between Jpmorgan Value and Nationwide Investor

Can any of the company-specific risk be diversified away by investing in both Jpmorgan Value and Nationwide Investor 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 Nationwide Investor 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 Nationwide Investor Destinations, you can compare the effects of market volatilities on Jpmorgan Value and Nationwide Investor 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 Nationwide Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Value and Nationwide Investor.

Diversification Opportunities for Jpmorgan Value and Nationwide Investor

0.9

Correlation Coefficient

Jpmorgan Value  Nationwide Investor

Almost no diversification

The 3 months correlation between Jpmorgan and Nationwide is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Value Advantage and Nationwide Investor Destinatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Investor 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 Nationwide Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Investor has no effect on the direction of Jpmorgan Value i.e., Jpmorgan Value and Nationwide Investor go up and down completely randomly.

Pair Corralation between Jpmorgan Value and Nationwide Investor

Assuming the 90 days horizon Jpmorgan Value Advantage is expected to generate 1.39 times more return on investment than Nationwide Investor. However, Jpmorgan Value is 1.39 times more volatile than Nationwide Investor Destinations. It trades about 0.16 of its potential returns per unit of risk. Nationwide Investor Destinations is currently generating about 0.21 per unit of risk. If you would invest  4,042  in Jpmorgan Value Advantage on September 10, 2024 and sell it today you would earn a total of  312.00  from holding Jpmorgan Value Advantage or generate 7.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

Jpmorgan Value Advantage  vs.  Nationwide Investor Destinatio

Jpmorgan Value Advantage

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Value Advantage are ranked lower than 12 (%) 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.

Nationwide Investor

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Investor Destinations are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nationwide Investor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jpmorgan Value and Nationwide Investor

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

The idea behind Jpmorgan Value Advantage and Nationwide Investor Destinations 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.