Correlation Between Jpmorgan Trust and Jpmorgan Mid

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

By analyzing existing cross correlation between Jpmorgan Trust I and Jpmorgan Mid Cap, you can compare the effects of market volatilities on Jpmorgan Trust 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 Jpmorgan Trust with a short position of Jpmorgan Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Trust and Jpmorgan Mid.

Diversification Opportunities for Jpmorgan Trust and Jpmorgan Mid

0.6

Correlation Coefficient

Jpmorgan Trust  Jpmorgan Mid

Poor diversification

The 3 months correlation between Jpmorgan and Jpmorgan is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Trust I 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 Jpmorgan Trust 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 Trust I 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 Jpmorgan Trust i.e., Jpmorgan Trust and Jpmorgan Mid go up and down completely randomly.

Pair Corralation between Jpmorgan Trust and Jpmorgan Mid

Assuming the 90 days horizon Jpmorgan Trust is expected to generate 7.25 times less return on investment than Jpmorgan Mid. But when comparing it to its historical volatility, Jpmorgan Trust I is 5.95 times less risky than Jpmorgan Mid. It trades about 0.13 of its potential returns per unit of risk. Jpmorgan Mid Cap is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  3,866  in Jpmorgan Mid Cap on September 12, 2024 and sell it today you would earn a total of  282.00  from holding Jpmorgan Mid Cap or generate 7.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Jpmorgan Trust I  vs.  Jpmorgan Mid Cap

Jpmorgan Trust I

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Trust I are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan Mid Cap

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Mid Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Jpmorgan Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jpmorgan Trust and Jpmorgan Mid

The main advantage of trading using opposite Jpmorgan Trust and Jpmorgan Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Trust 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.

The idea behind Jpmorgan Trust I and Jpmorgan Mid Cap 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.