Correlation Between Jpmorgan Mid and Amg Managers

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

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

Diversification Opportunities for Jpmorgan Mid and Amg Managers

0.98

Correlation Coefficient

Jpmorgan Mid  Amg Managers

Almost no diversification

The 3 months correlation between Jpmorgan and Amg is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Mid Cap and Amg Managers Fairpointe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Fairpointe and Jpmorgan Mid 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 Mid Cap are associated (or correlated) with Amg Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Managers Fairpointe has no effect on the direction of Jpmorgan Mid i.e., Jpmorgan Mid and Amg Managers go up and down completely randomly.

Pair Corralation between Jpmorgan Mid and Amg Managers

Assuming the 90 days horizon Jpmorgan Mid is expected to generate 1.39 times less return on investment than Amg Managers. But when comparing it to its historical volatility, Jpmorgan Mid Cap is 1.04 times less risky than Amg Managers. It trades about 0.18 of its potential returns per unit of risk. Amg Managers Fairpointe is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  2,307  in Amg Managers Fairpointe on September 4, 2024 and sell it today you would earn a total of  294.00  from holding Amg Managers Fairpointe or generate 12.74% return on investment over 90 days.

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

Jpmorgan Mid Cap  vs.  Amg Managers Fairpointe

Jpmorgan Mid Cap

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Mid Cap are ranked lower than 14 (%) 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.

Amg Managers Fairpointe

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Managers Fairpointe are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Amg Managers may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jpmorgan Mid and Amg Managers

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

The idea behind Jpmorgan Mid Cap and Amg Managers Fairpointe 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.