Correlation Between Jpmorgan Investor and American Funds

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

By analyzing existing cross correlation between Jpmorgan Investor Growth and American Funds Conservative, you can compare the effects of market volatilities on Jpmorgan Investor and American Funds 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 Investor with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Investor and American Funds.

Diversification Opportunities for Jpmorgan Investor and American Funds

0.58

Correlation Coefficient

Jpmorgan Investor  American Funds

Very weak diversification

The 3 months correlation between Jpmorgan and American is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Investor Growth and American Funds Conservative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Conse and Jpmorgan Investor 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 Investor Growth are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Conse has no effect on the direction of Jpmorgan Investor i.e., Jpmorgan Investor and American Funds go up and down completely randomly.

Pair Corralation between Jpmorgan Investor and American Funds

Assuming the 90 days horizon Jpmorgan Investor Growth is expected to under-perform the American Funds. In addition to that, Jpmorgan Investor is 1.48 times more volatile than American Funds Conservative. It trades about -0.02 of its total potential returns per unit of risk. American Funds Conservative is currently generating about 0.06 per unit of volatility. If you would invest  1,313  in American Funds Conservative on December 30, 2024 and sell it today you would earn a total of  19.00  from holding American Funds Conservative or generate 1.45% return on investment over 90 days.

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

Jpmorgan Investor Growth  vs.  American Funds Conservative

Jpmorgan Investor Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jpmorgan Investor Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Jpmorgan Investor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

American Funds Conse

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in American Funds Conservative are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, American Funds 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 Investor and American Funds

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

The idea behind Jpmorgan Investor Growth and American Funds Conservative 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.