Correlation Between Thornburg International and Jpmorgan Mid
Can any of the company-specific risk be diversified away by investing in both Thornburg International and Jpmorgan Mid 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 Thornburg International and Jpmorgan Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg International Value and Jpmorgan Mid Cap, you can compare the effects of market volatilities on Thornburg International and Jpmorgan Mid 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 Thornburg International with a short position of Jpmorgan Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg International and Jpmorgan Mid.
Diversification Opportunities for Thornburg International and Jpmorgan Mid
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thornburg and JPMORGAN is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg International Value and Jpmorgan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Mid Cap and Thornburg International 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 Thornburg International Value are associated (or correlated) with Jpmorgan Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Mid Cap has no effect on the direction of Thornburg International i.e., Thornburg International and Jpmorgan Mid go up and down completely randomly.
Pair Corralation between Thornburg International and Jpmorgan Mid
Assuming the 90 days horizon Thornburg International Value is expected to generate 0.77 times more return on investment than Jpmorgan Mid. However, Thornburg International Value is 1.31 times less risky than Jpmorgan Mid. It trades about 0.06 of its potential returns per unit of risk. Jpmorgan Mid Cap is currently generating about -0.17 per unit of risk. If you would invest 2,722 in Thornburg International Value on December 5, 2024 and sell it today you would earn a total of 75.00 from holding Thornburg International Value or generate 2.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Thornburg International Value vs. Jpmorgan Mid Cap
Performance |
Timeline |
Thornburg International |
Jpmorgan Mid Cap |
Thornburg International and Jpmorgan Mid Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thornburg International and Jpmorgan Mid
The main advantage of trading using opposite Thornburg International and Jpmorgan Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg International position performs unexpectedly, Jpmorgan Mid 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 Mid will offset losses from the drop in Jpmorgan Mid's long position.Thornburg International vs. Jpmorgan Mid Cap | Thornburg International vs. Jpmorgan International Value | Thornburg International vs. Jpmorgan Equity Fund | Thornburg International vs. Jpmorgan High Yield |
Jpmorgan Mid vs. Jpmorgan International Value | Jpmorgan Mid vs. Jpmorgan Equity Fund | Jpmorgan Mid vs. Jpmorgan High Yield | Jpmorgan Mid vs. Jpmorgan Small Cap |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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