Correlation Between Europacific Growth and Jpmorgan Small

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

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

Diversification Opportunities for Europacific Growth and Jpmorgan Small

0.3

Correlation Coefficient

Europacific Growth  Jpmorgan Small

Weak diversification

The 3 months correlation between Europacific and Jpmorgan is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Jpmorgan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Small Cap and Europacific Growth 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 Europacific Growth Fund are associated (or correlated) with Jpmorgan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Small Cap has no effect on the direction of Europacific Growth i.e., Europacific Growth and Jpmorgan Small go up and down completely randomly.

Pair Corralation between Europacific Growth and Jpmorgan Small

Assuming the 90 days horizon Europacific Growth Fund is expected to under-perform the Jpmorgan Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Europacific Growth Fund is 1.41 times less risky than Jpmorgan Small. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Jpmorgan Small Cap is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  5,408  in Jpmorgan Small Cap on September 27, 2024 and sell it today you would earn a total of  131.00  from holding Jpmorgan Small Cap or generate 2.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

Europacific Growth Fund  vs.  Jpmorgan Small Cap

Europacific Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Europacific Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Jpmorgan Small Cap

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Europacific Growth and Jpmorgan Small

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

The idea behind Europacific Growth Fund and Jpmorgan Small Cap 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.