Correlation Between Allianzgi Diversified and Jpmorgan Smartretirement

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

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

Diversification Opportunities for Allianzgi Diversified and Jpmorgan Smartretirement

0.33

Correlation Coefficient

Allianzgi Diversified  Jpmorgan Smartretirement

Weak diversification

The 3 months correlation between Allianzgi and Jpmorgan is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Diversified Income and Jpmorgan Smartretirement Incom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement and Allianzgi Diversified 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 Allianzgi Diversified Income 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 Allianzgi Diversified i.e., Allianzgi Diversified and Jpmorgan Smartretirement go up and down completely randomly.

Pair Corralation between Allianzgi Diversified and Jpmorgan Smartretirement

Assuming the 90 days horizon Allianzgi Diversified Income is expected to generate 1.3 times more return on investment than Jpmorgan Smartretirement. However, Allianzgi Diversified is 1.3 times more volatile than Jpmorgan Smartretirement Income. It trades about -0.14 of its potential returns per unit of risk. Jpmorgan Smartretirement Income is currently generating about -0.33 per unit of risk. If you would invest  2,387  in Allianzgi Diversified Income on October 10, 2024 and sell it today you would lose (80.00) from holding Allianzgi Diversified Income or give up 3.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Allianzgi Diversified Income  vs.  Jpmorgan Smartretirement Incom

Allianzgi Diversified

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Diversified Income are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Allianzgi Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan Smartretirement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Smartretirement Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic 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 Allianzgi Diversified and Jpmorgan Smartretirement

The main advantage of trading using opposite Allianzgi Diversified and Jpmorgan Smartretirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Diversified 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 Allianzgi Diversified Income and Jpmorgan Smartretirement Income 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.