Correlation Between Franklin and Jpmorgan Trust

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

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

Diversification Opportunities for Franklin and Jpmorgan Trust

0.97

Correlation Coefficient

Franklin  Jpmorgan Trust

Almost no diversification

The 3 months correlation between Franklin and Jpmorgan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money 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 Franklin 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 Franklin Government Money 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 Franklin i.e., Franklin and Jpmorgan Trust go up and down completely randomly.

Pair Corralation between Franklin and Jpmorgan Trust

Assuming the 90 days horizon Franklin Government Money is expected to generate 1.02 times more return on investment than Jpmorgan Trust. However, Franklin is 1.02 times more volatile than Jpmorgan Trust I. It trades about 0.13 of its potential returns per unit of risk. Jpmorgan Trust I is currently generating about 0.12 per unit of risk. If you would invest  99.00  in Franklin Government Money on September 2, 2024 and sell it today you would earn a total of  1.00  from holding Franklin Government Money or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	96.97%
Values	Daily Returns

Franklin Government Money  vs.  Jpmorgan Trust I

Franklin Government Money

Risk-Adjusted Performance

9 of 100

OK

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

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.

Pair Trading with Franklin and Jpmorgan Trust

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

The idea behind Franklin Government Money and Jpmorgan Trust I 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.