Correlation Between Jpmorgan Small and Greenspring Fund

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

Diversification Opportunities for Jpmorgan Small and Greenspring Fund

0.98

Correlation Coefficient

Jpmorgan Small  Greenspring Fund

Almost no diversification

The 3 months correlation between Jpmorgan and Greenspring is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Small Cap and Greenspring Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenspring Fund Retail 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 Greenspring Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenspring Fund Retail has no effect on the direction of Jpmorgan Small i.e., Jpmorgan Small and Greenspring Fund go up and down completely randomly.

Pair Corralation between Jpmorgan Small and Greenspring Fund

Assuming the 90 days horizon Jpmorgan Small Cap is expected to under-perform the Greenspring Fund. In addition to that, Jpmorgan Small is 1.15 times more volatile than Greenspring Fund Retail. It trades about -0.09 of its total potential returns per unit of risk. Greenspring Fund Retail is currently generating about -0.07 per unit of volatility. If you would invest  2,530  in Greenspring Fund Retail on December 23, 2024 and sell it today you would lose (111.00) from holding Greenspring Fund Retail or give up 4.39% of portfolio value over 90 days.

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

Jpmorgan Small Cap  vs.  Greenspring Fund Retail

Jpmorgan Small Cap

Risk-Adjusted Performance

Very Weak

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

Greenspring Fund Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greenspring Fund Retail has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Greenspring 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 Greenspring Fund

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

The idea behind Jpmorgan Small Cap and Greenspring Fund Retail 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.