Correlation Between Jpmorgan Smartretirement and Jpmorgan Research

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

Diversification Opportunities for Jpmorgan Smartretirement and Jpmorgan Research

0.63

Correlation Coefficient

Jpmorgan Smartretirement  Jpmorgan Research

Poor diversification

The 3 months correlation between Jpmorgan and Jpmorgan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement 2035 and Jpmorgan Research Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Research Equity 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 Jpmorgan Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Research Equity has no effect on the direction of Jpmorgan Smartretirement i.e., Jpmorgan Smartretirement and Jpmorgan Research go up and down completely randomly.

Pair Corralation between Jpmorgan Smartretirement and Jpmorgan Research

Assuming the 90 days horizon Jpmorgan Smartretirement is expected to generate 2.23 times less return on investment than Jpmorgan Research. In addition to that, Jpmorgan Smartretirement is 1.1 times more volatile than Jpmorgan Research Equity. It trades about 0.03 of its total potential returns per unit of risk. Jpmorgan Research Equity is currently generating about 0.08 per unit of volatility. If you would invest  1,369  in Jpmorgan Research Equity on September 28, 2024 and sell it today you would earn a total of  81.00  from holding Jpmorgan Research Equity or generate 5.92% return on investment over 90 days.

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

Jpmorgan Smartretirement 2035  vs.  Jpmorgan Research Equity

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 basic indicators, Jpmorgan Smartretirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan Research Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Research Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Jpmorgan Research 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 Jpmorgan Research

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

The idea behind Jpmorgan Smartretirement 2035 and Jpmorgan Research Equity 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.