Correlation Between Jpmorgan Small and Carillon Chartwell

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

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

Diversification Opportunities for Jpmorgan Small and Carillon Chartwell

0.97

Correlation Coefficient

Jpmorgan Small  Carillon Chartwell

Almost no diversification

The 3 months correlation between JPMORGAN and Carillon is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Small Cap and Carillon Chartwell Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carillon Chartwell Small and Jpmorgan Small 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 Small Cap are associated (or correlated) with Carillon Chartwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carillon Chartwell Small has no effect on the direction of Jpmorgan Small i.e., Jpmorgan Small and Carillon Chartwell go up and down completely randomly.

Pair Corralation between Jpmorgan Small and Carillon Chartwell

Assuming the 90 days horizon Jpmorgan Small is expected to generate 1.34 times less return on investment than Carillon Chartwell. But when comparing it to its historical volatility, Jpmorgan Small Cap is 1.05 times less risky than Carillon Chartwell. It trades about 0.18 of its potential returns per unit of risk. Carillon Chartwell Small is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,631  in Carillon Chartwell Small on September 2, 2024 and sell it today you would earn a total of  302.00  from holding Carillon Chartwell Small or generate 18.52% return on investment over 90 days.

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

Jpmorgan Small Cap  vs.  Carillon Chartwell Small

Jpmorgan Small Cap

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Small Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jpmorgan Small showed solid returns over the last few months and may actually be approaching a breakup point.

Carillon Chartwell Small

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carillon Chartwell Small are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Carillon Chartwell showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jpmorgan Small and Carillon Chartwell

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

The idea behind Jpmorgan Small Cap and Carillon Chartwell Small 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.