Correlation Between Jpmorgan Smartretirement and Western Asset

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

By analyzing existing cross correlation between Jpmorgan Smartretirement 2035 and Western Asset E, you can compare the effects of market volatilities on Jpmorgan Smartretirement and Western Asset 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 Smartretirement with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement and Western Asset.

Diversification Opportunities for Jpmorgan Smartretirement and Western Asset

0.25

Correlation Coefficient

Jpmorgan Smartretirement  Western Asset

Modest diversification

The 3 months correlation between Jpmorgan and Western is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement 2035 and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E and Jpmorgan Smartretirement 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 Smartretirement 2035 are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset E has no effect on the direction of Jpmorgan Smartretirement i.e., Jpmorgan Smartretirement and Western Asset go up and down completely randomly.

Pair Corralation between Jpmorgan Smartretirement and Western Asset

Assuming the 90 days horizon Jpmorgan Smartretirement is expected to generate 3.97 times less return on investment than Western Asset. In addition to that, Jpmorgan Smartretirement is 1.93 times more volatile than Western Asset E. It trades about 0.01 of its total potential returns per unit of risk. Western Asset E is currently generating about 0.11 per unit of volatility. If you would invest  1,026  in Western Asset E on December 27, 2024 and sell it today you would earn a total of  23.00  from holding Western Asset E or generate 2.24% return on investment over 90 days.

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

Jpmorgan Smartretirement 2035  vs.  Western Asset E

Jpmorgan Smartretirement

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Smartretirement 2035 are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Jpmorgan Smartretirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Western Asset E

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset E are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Western Asset 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 Smartretirement and Western Asset

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

The idea behind Jpmorgan Smartretirement 2035 and Western Asset E 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.