Correlation Between Vanguard 500 and Jpmorgan Trust
Can any of the company-specific risk be diversified away by investing in both Vanguard 500 and Jpmorgan Trust 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 Vanguard 500 and Jpmorgan Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard 500 Index and Jpmorgan Trust I, you can compare the effects of market volatilities on Vanguard 500 and Jpmorgan Trust 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 Vanguard 500 with a short position of Jpmorgan Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard 500 and Jpmorgan Trust.
Diversification Opportunities for Vanguard 500 and Jpmorgan Trust
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Jpmorgan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard 500 Index and Jpmorgan Trust I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Trust I and Vanguard 500 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 Vanguard 500 Index are associated (or correlated) with Jpmorgan Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Trust I has no effect on the direction of Vanguard 500 i.e., Vanguard 500 and Jpmorgan Trust go up and down completely randomly.
Pair Corralation between Vanguard 500 and Jpmorgan Trust
Assuming the 90 days horizon Vanguard 500 Index is expected to generate 5.22 times more return on investment than Jpmorgan Trust. However, Vanguard 500 is 5.22 times more volatile than Jpmorgan Trust I. It trades about 0.18 of its potential returns per unit of risk. Jpmorgan Trust I is currently generating about 0.13 per unit of risk. If you would invest 51,888 in Vanguard 500 Index on September 13, 2024 and sell it today you would earn a total of 3,941 from holding Vanguard 500 Index or generate 7.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
Vanguard 500 Index vs. Jpmorgan Trust I
Performance |
Timeline |
Vanguard 500 Index |
Jpmorgan Trust I |
Vanguard 500 and Jpmorgan Trust Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vanguard 500 and Jpmorgan Trust
The main advantage of trading using opposite Vanguard 500 and Jpmorgan Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 500 position performs unexpectedly, Jpmorgan Trust 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 Trust will offset losses from the drop in Jpmorgan Trust's long position.Vanguard 500 vs. Vanguard Total Stock | Vanguard 500 vs. Vanguard Mid Cap Index | Vanguard 500 vs. Vanguard Small Cap Index | Vanguard 500 vs. Vanguard Total Bond |
Jpmorgan Trust vs. Touchstone Large Cap | Jpmorgan Trust vs. Virtus Nfj Large Cap | Jpmorgan Trust vs. Large Cap Growth Profund | Jpmorgan Trust vs. Dunham Large 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Transaction History View history of all your transactions and understand their impact on performance | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |