Correlation Between Jpmorgan Short and James Balanced

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

By analyzing existing cross correlation between Jpmorgan Short Duration and James Balanced Golden, you can compare the effects of market volatilities on Jpmorgan Short and James Balanced 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 Short with a short position of James Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Short and James Balanced.

Diversification Opportunities for Jpmorgan Short and James Balanced

-0.17

Correlation Coefficient

Jpmorgan Short  James Balanced

Good diversification

The 3 months correlation between Jpmorgan and James is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Short Duration and James Balanced Golden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Balanced Golden and Jpmorgan Short 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 Short Duration are associated (or correlated) with James Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Balanced Golden has no effect on the direction of Jpmorgan Short i.e., Jpmorgan Short and James Balanced go up and down completely randomly.

Pair Corralation between Jpmorgan Short and James Balanced

Assuming the 90 days horizon Jpmorgan Short Duration is expected to generate 0.17 times more return on investment than James Balanced. However, Jpmorgan Short Duration is 5.9 times less risky than James Balanced. It trades about 0.32 of its potential returns per unit of risk. James Balanced Golden is currently generating about -0.03 per unit of risk. If you would invest  1,070  in Jpmorgan Short Duration on December 21, 2024 and sell it today you would earn a total of  18.00  from holding Jpmorgan Short Duration or generate 1.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Jpmorgan Short Duration  vs.  James Balanced Golden

Jpmorgan Short Duration

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Short Duration are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

James Balanced Golden

Risk-Adjusted Performance

Very Weak

Over the last 90 days James Balanced Golden has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, James Balanced 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 Short and James Balanced

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

The idea behind Jpmorgan Short Duration and James Balanced Golden 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.