Correlation Between Jpmorgan Intrepid and Franklin High

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

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

Diversification Opportunities for Jpmorgan Intrepid and Franklin High

0.25

Correlation Coefficient

Jpmorgan Intrepid  Franklin High

Modest diversification

The 3 months correlation between Jpmorgan and Franklin is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Intrepid Mid and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Jpmorgan Intrepid 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 Intrepid Mid are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Jpmorgan Intrepid i.e., Jpmorgan Intrepid and Franklin High go up and down completely randomly.

Pair Corralation between Jpmorgan Intrepid and Franklin High

Assuming the 90 days horizon Jpmorgan Intrepid Mid is expected to generate 3.06 times more return on investment than Franklin High. However, Jpmorgan Intrepid is 3.06 times more volatile than Franklin High Yield. It trades about 0.09 of its potential returns per unit of risk. Franklin High Yield is currently generating about -0.01 per unit of risk. If you would invest  1,845  in Jpmorgan Intrepid Mid on September 15, 2024 and sell it today you would earn a total of  89.00  from holding Jpmorgan Intrepid Mid or generate 4.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Jpmorgan Intrepid Mid  vs.  Franklin High Yield

Jpmorgan Intrepid Mid

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Intrepid Mid are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Intrepid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Franklin High 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 Intrepid and Franklin High

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

The idea behind Jpmorgan Intrepid Mid and Franklin High Yield 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.