Correlation Between Jpmorgan Trust and Dreyfus Bond

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

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

Diversification Opportunities for Jpmorgan Trust and Dreyfus Bond

-0.73

Correlation Coefficient

Jpmorgan Trust  Dreyfus Bond

Pay attention - limited upside

The 3 months correlation between Jpmorgan and Dreyfus is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Trust I and Dreyfus Bond Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Bond Market and Jpmorgan Trust 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 Trust I are associated (or correlated) with Dreyfus Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Bond Market has no effect on the direction of Jpmorgan Trust i.e., Jpmorgan Trust and Dreyfus Bond go up and down completely randomly.

Pair Corralation between Jpmorgan Trust and Dreyfus Bond

Assuming the 90 days horizon Jpmorgan Trust I is expected to generate 0.42 times more return on investment than Dreyfus Bond. However, Jpmorgan Trust I is 2.38 times less risky than Dreyfus Bond. It trades about 0.12 of its potential returns per unit of risk. Dreyfus Bond Market is currently generating about -0.05 per unit of risk. If you would invest  99.00  in Jpmorgan Trust I on September 1, 2024 and sell it today you would earn a total of  1.00  from holding Jpmorgan Trust I or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Jpmorgan Trust I  vs.  Dreyfus Bond Market

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.

Dreyfus Bond Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfus Bond Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dreyfus Bond 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 Trust and Dreyfus Bond

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

The idea behind Jpmorgan Trust I and Dreyfus Bond Market 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.