Correlation Between Jpmorgan Value and Acadian Emerging

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

Diversification Opportunities for Jpmorgan Value and Acadian Emerging

-0.02

Correlation Coefficient

Jpmorgan Value  Acadian Emerging

Good diversification

The 3 months correlation between Jpmorgan and Acadian is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Value Advantage and Acadian Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadian Emerging Markets 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 Acadian Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadian Emerging Markets has no effect on the direction of Jpmorgan Value i.e., Jpmorgan Value and Acadian Emerging go up and down completely randomly.

Pair Corralation between Jpmorgan Value and Acadian Emerging

Assuming the 90 days horizon Jpmorgan Value Advantage is expected to under-perform the Acadian Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jpmorgan Value Advantage is 1.21 times less risky than Acadian Emerging. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Acadian Emerging Markets is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  2,407  in Acadian Emerging Markets on September 12, 2024 and sell it today you would lose (10.00) from holding Acadian Emerging Markets or give up 0.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Jpmorgan Value Advantage  vs.  Acadian Emerging Markets

Jpmorgan Value Advantage

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Value Advantage are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Jpmorgan Value may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Acadian Emerging Markets

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Acadian Emerging Markets are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Acadian Emerging 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 Acadian Emerging

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

The idea behind Jpmorgan Value Advantage and Acadian Emerging Markets 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.