Correlation Between Guggenheim Styleplus and Jpmorgan

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

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

Diversification Opportunities for Guggenheim Styleplus and Jpmorgan

0.51

Correlation Coefficient

Guggenheim Styleplus  Jpmorgan

Very weak diversification

The 3 months correlation between Guggenheim and Jpmorgan is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Styleplus and Jpmorgan Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Equity and Guggenheim Styleplus 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 Styleplus are associated (or correlated) with Jpmorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Equity has no effect on the direction of Guggenheim Styleplus i.e., Guggenheim Styleplus and Jpmorgan go up and down completely randomly.

Pair Corralation between Guggenheim Styleplus and Jpmorgan

Assuming the 90 days horizon Guggenheim Styleplus is expected to generate 0.87 times more return on investment than Jpmorgan. However, Guggenheim Styleplus is 1.16 times less risky than Jpmorgan. It trades about -0.1 of its potential returns per unit of risk. Jpmorgan Equity Fund is currently generating about -0.09 per unit of risk. If you would invest  2,096  in Guggenheim Styleplus on December 22, 2024 and sell it today you would lose (117.00) from holding Guggenheim Styleplus or give up 5.58% of portfolio value over 90 days.

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

Guggenheim Styleplus   vs.  Jpmorgan Equity Fund

Guggenheim Styleplus

Risk-Adjusted Performance

Very Weak

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

Jpmorgan Equity

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Guggenheim Styleplus and Jpmorgan

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

The idea behind Guggenheim Styleplus and Jpmorgan Equity Fund 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 Transaction History module to view history of all your transactions and understand their impact on performance.