Correlation Between Guggenheim Managed and Jpmorgan Large

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

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

Diversification Opportunities for Guggenheim Managed and Jpmorgan Large

0.42

Correlation Coefficient

Guggenheim Managed  Jpmorgan Large

Very weak diversification

The 3 months correlation between Guggenheim and Jpmorgan is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Managed Futures and Jpmorgan Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Large Cap and Guggenheim Managed 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 Guggenheim Managed Futures are associated (or correlated) with Jpmorgan Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Large Cap has no effect on the direction of Guggenheim Managed i.e., Guggenheim Managed and Jpmorgan Large go up and down completely randomly.

Pair Corralation between Guggenheim Managed and Jpmorgan Large

Assuming the 90 days horizon Guggenheim Managed Futures is expected to under-perform the Jpmorgan Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Guggenheim Managed Futures is 1.51 times less risky than Jpmorgan Large. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Jpmorgan Large Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,854  in Jpmorgan Large Cap on October 9, 2024 and sell it today you would earn a total of  1,335  from holding Jpmorgan Large Cap or generate 34.64% return on investment over 90 days.

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

Guggenheim Managed Futures  vs.  Jpmorgan Large Cap

Guggenheim Managed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jpmorgan Large Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Large Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Jpmorgan Large may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Guggenheim Managed and Jpmorgan Large

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

The idea behind Guggenheim Managed Futures and Jpmorgan Large 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.

Check out your portfolio center.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.