Correlation Between Jpmorgan Income and Mfs International

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

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

Diversification Opportunities for Jpmorgan Income and Mfs International

0.7

Correlation Coefficient

Jpmorgan Income  Mfs International

Poor diversification

The 3 months correlation between Jpmorgan and Mfs is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Income Builder and Mfs International Diversificat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International and Jpmorgan Income 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 Income Builder are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International has no effect on the direction of Jpmorgan Income i.e., Jpmorgan Income and Mfs International go up and down completely randomly.

Pair Corralation between Jpmorgan Income and Mfs International

Assuming the 90 days horizon Jpmorgan Income Builder is expected to generate 0.44 times more return on investment than Mfs International. However, Jpmorgan Income Builder is 2.28 times less risky than Mfs International. It trades about 0.07 of its potential returns per unit of risk. Mfs International Diversification is currently generating about -0.05 per unit of risk. If you would invest  992.00  in Jpmorgan Income Builder on August 31, 2024 and sell it today you would earn a total of  14.00  from holding Jpmorgan Income Builder or generate 1.41% return on investment over 90 days.

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

Jpmorgan Income Builder  vs.  Mfs International Diversificat

Jpmorgan Income Builder

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Income Builder are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mfs International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mfs International Diversification has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking indicators, Mfs International 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 Income and Mfs International

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

The idea behind Jpmorgan Income Builder and Mfs International Diversification 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.