Correlation Between Jpmorgan Small and Balanced Fund

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

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

Diversification Opportunities for Jpmorgan Small and Balanced Fund

0.74

Correlation Coefficient

Jpmorgan Small  Balanced Fund

Poor diversification

The 3 months correlation between Jpmorgan and Balanced is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Small Cap and Balanced Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Fund Investor and Jpmorgan Small 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 Small Cap are associated (or correlated) with Balanced Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Fund Investor has no effect on the direction of Jpmorgan Small i.e., Jpmorgan Small and Balanced Fund go up and down completely randomly.

Pair Corralation between Jpmorgan Small and Balanced Fund

Assuming the 90 days horizon Jpmorgan Small Cap is expected to generate 1.37 times more return on investment than Balanced Fund. However, Jpmorgan Small is 1.37 times more volatile than Balanced Fund Investor. It trades about 0.3 of its potential returns per unit of risk. Balanced Fund Investor is currently generating about 0.1 per unit of risk. If you would invest  1,009  in Jpmorgan Small Cap on October 20, 2024 and sell it today you would earn a total of  51.00  from holding Jpmorgan Small Cap or generate 5.05% return on investment over 90 days.

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

Jpmorgan Small Cap  vs.  Balanced Fund Investor

Jpmorgan Small Cap

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Small Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Jpmorgan Small may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Balanced Fund Investor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Balanced Fund Investor has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Balanced Fund 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 Small and Balanced Fund

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

The idea behind Jpmorgan Small Cap and Balanced Fund Investor 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 Stocks Directory module to find actively traded stocks across global markets.