Correlation Between Jpmorgan Floating and Auer Growth

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

By analyzing existing cross correlation between Jpmorgan Floating Rate and Auer Growth Fund, you can compare the effects of market volatilities on Jpmorgan Floating and Auer Growth 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 Floating with a short position of Auer Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Floating and Auer Growth.

Diversification Opportunities for Jpmorgan Floating and Auer Growth

0.57

Correlation Coefficient

Jpmorgan Floating  Auer Growth

Very weak diversification

The 3 months correlation between Jpmorgan and Auer is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Floating Rate and Auer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auer Growth Fund and Jpmorgan Floating 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 Floating Rate are associated (or correlated) with Auer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auer Growth Fund has no effect on the direction of Jpmorgan Floating i.e., Jpmorgan Floating and Auer Growth go up and down completely randomly.

Pair Corralation between Jpmorgan Floating and Auer Growth

Assuming the 90 days horizon Jpmorgan Floating is expected to generate 4.28 times less return on investment than Auer Growth. But when comparing it to its historical volatility, Jpmorgan Floating Rate is 8.72 times less risky than Auer Growth. It trades about 0.24 of its potential returns per unit of risk. Auer Growth Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,659  in Auer Growth Fund on September 4, 2024 and sell it today you would earn a total of  110.00  from holding Auer Growth Fund or generate 6.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Jpmorgan Floating Rate  vs.  Auer Growth Fund

Jpmorgan Floating Rate

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Floating Rate are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Auer Growth Fund

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Auer Growth Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Auer Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jpmorgan Floating and Auer Growth

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

The idea behind Jpmorgan Floating Rate and Auer Growth Fund 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.