Correlation Between Jpmorgan Smartretirement and Gamco Natural

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

Diversification Opportunities for Jpmorgan Smartretirement and Gamco Natural

0.54

Correlation Coefficient

Jpmorgan Smartretirement  Gamco Natural

Very weak diversification

The 3 months correlation between Jpmorgan and Gamco is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement 2035 and Gamco Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Natural Resources 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 Gamco Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Natural Resources has no effect on the direction of Jpmorgan Smartretirement i.e., Jpmorgan Smartretirement and Gamco Natural go up and down completely randomly.

Pair Corralation between Jpmorgan Smartretirement and Gamco Natural

Assuming the 90 days horizon Jpmorgan Smartretirement 2035 is expected to generate 0.83 times more return on investment than Gamco Natural. However, Jpmorgan Smartretirement 2035 is 1.21 times less risky than Gamco Natural. It trades about 0.05 of its potential returns per unit of risk. Gamco Natural Resources is currently generating about 0.01 per unit of risk. If you would invest  1,701  in Jpmorgan Smartretirement 2035 on September 28, 2024 and sell it today you would earn a total of  346.00  from holding Jpmorgan Smartretirement 2035 or generate 20.34% return on investment over 90 days.

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

Jpmorgan Smartretirement 2035  vs.  Gamco Natural Resources

Jpmorgan Smartretirement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Smartretirement 2035 has generated negative risk-adjusted returns adding no value to fund investors. 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.

Gamco Natural Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamco Natural Resources has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 Jpmorgan Smartretirement and Gamco Natural

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

The idea behind Jpmorgan Smartretirement 2035 and Gamco Natural Resources 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.