Correlation Between Transamerica Asset and Jpmorgan Smartretirement*

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

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

Diversification Opportunities for Transamerica Asset and Jpmorgan Smartretirement*

0.37

Correlation Coefficient

Transamerica Asset  Jpmorgan Smartretirement*

Weak diversification

The 3 months correlation between Transamerica and Jpmorgan is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Asset Allocation and Jpmorgan Smartretirement Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement* and Transamerica Asset 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 Transamerica Asset Allocation are associated (or correlated) with Jpmorgan Smartretirement*. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement* has no effect on the direction of Transamerica Asset i.e., Transamerica Asset and Jpmorgan Smartretirement* go up and down completely randomly.

Pair Corralation between Transamerica Asset and Jpmorgan Smartretirement*

Assuming the 90 days horizon Transamerica Asset Allocation is expected to under-perform the Jpmorgan Smartretirement*. In addition to that, Transamerica Asset is 2.93 times more volatile than Jpmorgan Smartretirement Blend. It trades about -0.09 of its total potential returns per unit of risk. Jpmorgan Smartretirement Blend is currently generating about 0.06 per unit of volatility. If you would invest  2,035  in Jpmorgan Smartretirement Blend on December 24, 2024 and sell it today you would earn a total of  28.00  from holding Jpmorgan Smartretirement Blend or generate 1.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Transamerica Asset Allocation   vs.  Jpmorgan Smartretirement Blend

Transamerica Asset

Risk-Adjusted Performance

Very Weak

Over the last 90 days Transamerica Asset Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Jpmorgan Smartretirement*

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Smartretirement Blend are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Jpmorgan Smartretirement* is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Transamerica Asset and Jpmorgan Smartretirement*

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

The idea behind Transamerica Asset Allocation and Jpmorgan Smartretirement Blend 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.