Correlation Between Jpmorgan Value and Pear Tree

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

Diversification Opportunities for Jpmorgan Value and Pear Tree

0.13

Correlation Coefficient

Jpmorgan Value  Pear Tree

Average diversification

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

Pair Corralation between Jpmorgan Value and Pear Tree

Assuming the 90 days horizon Jpmorgan Value is expected to generate 16.28 times less return on investment than Pear Tree. But when comparing it to its historical volatility, Jpmorgan Value Advantage is 1.18 times less risky than Pear Tree. It trades about 0.01 of its potential returns per unit of risk. Pear Tree Polaris is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,481  in Pear Tree Polaris on December 22, 2024 and sell it today you would earn a total of  121.00  from holding Pear Tree Polaris or generate 8.17% return on investment over 90 days.

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

Jpmorgan Value Advantage  vs.  Pear Tree Polaris

Jpmorgan Value Advantage

Risk-Adjusted Performance

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 fairly strong basic indicators, Jpmorgan Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pear Tree Polaris

Risk-Adjusted Performance

Good

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

Pair Trading with Jpmorgan Value and Pear Tree

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

The idea behind Jpmorgan Value Advantage and Pear Tree Polaris 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.