Correlation Between M Large and Jpmorgan Core

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

By analyzing existing cross correlation between M Large Cap and Jpmorgan E Plus, you can compare the effects of market volatilities on M Large and Jpmorgan Core 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 M Large with a short position of Jpmorgan Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Large and Jpmorgan Core.

Diversification Opportunities for M Large and Jpmorgan Core

-0.56

Correlation Coefficient

M Large  Jpmorgan Core

Excellent diversification

The 3 months correlation between MTCGX and Jpmorgan is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding M Large Cap and Jpmorgan E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan E Plus and M Large 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 M Large Cap are associated (or correlated) with Jpmorgan Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan E Plus has no effect on the direction of M Large i.e., M Large and Jpmorgan Core go up and down completely randomly.

Pair Corralation between M Large and Jpmorgan Core

Assuming the 90 days horizon M Large Cap is expected to under-perform the Jpmorgan Core. In addition to that, M Large is 7.17 times more volatile than Jpmorgan E Plus. It trades about -0.13 of its total potential returns per unit of risk. Jpmorgan E Plus is currently generating about 0.18 per unit of volatility. If you would invest  704.00  in Jpmorgan E Plus on December 21, 2024 and sell it today you would earn a total of  22.00  from holding Jpmorgan E Plus or generate 3.13% return on investment over 90 days.

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

M Large Cap  vs.  Jpmorgan E Plus

M Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days M Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Jpmorgan E Plus

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan E Plus are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with M Large and Jpmorgan Core

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

The idea behind M Large Cap and Jpmorgan E Plus 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.