Correlation Between Jpmorgan Value and Jpmorgan Income

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

Diversification Opportunities for Jpmorgan Value and Jpmorgan Income

-0.13

Correlation Coefficient

Jpmorgan Value  Jpmorgan Income

Good diversification

The 3 months correlation between Jpmorgan and Jpmorgan is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Value Advantage and Jpmorgan Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Income 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 Jpmorgan Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Income has no effect on the direction of Jpmorgan Value i.e., Jpmorgan Value and Jpmorgan Income go up and down completely randomly.

Pair Corralation between Jpmorgan Value and Jpmorgan Income

Assuming the 90 days horizon Jpmorgan Value Advantage is expected to under-perform the Jpmorgan Income. In addition to that, Jpmorgan Value is 11.05 times more volatile than Jpmorgan Income Fund. It trades about -0.22 of its total potential returns per unit of risk. Jpmorgan Income Fund is currently generating about 0.11 per unit of volatility. If you would invest  845.00  in Jpmorgan Income Fund on October 7, 2024 and sell it today you would earn a total of  5.00  from holding Jpmorgan Income Fund or generate 0.59% return on investment over 90 days.

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

Jpmorgan Value Advantage  vs.  Jpmorgan Income Fund

Jpmorgan Value Advantage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Value Advantage has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Jpmorgan Income

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Income Fund are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Jpmorgan Income 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 Value and Jpmorgan Income

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

The idea behind Jpmorgan Value Advantage and Jpmorgan Income 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.