Correlation Between Jpmorgan Floating and Jpmorgan Smartretirement

Can any of the company-specific risk be diversified away by investing in both Jpmorgan Floating and Jpmorgan Smartretirement 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 Jpmorgan Smartretirement 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 Jpmorgan Smartretirement 2040, you can compare the effects of market volatilities on Jpmorgan Floating and Jpmorgan Smartretirement 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 Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Floating and Jpmorgan Smartretirement.

Diversification Opportunities for Jpmorgan Floating and Jpmorgan Smartretirement

0.67

Correlation Coefficient

Jpmorgan Floating  Jpmorgan Smartretirement

Poor diversification

The 3 months correlation between Jpmorgan and Jpmorgan is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Floating Rate and Jpmorgan Smartretirement 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement 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 Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of Jpmorgan Floating i.e., Jpmorgan Floating and Jpmorgan Smartretirement go up and down completely randomly.

Pair Corralation between Jpmorgan Floating and Jpmorgan Smartretirement

Assuming the 90 days horizon Jpmorgan Floating is expected to generate 3.22 times less return on investment than Jpmorgan Smartretirement. But when comparing it to its historical volatility, Jpmorgan Floating Rate is 5.29 times less risky than Jpmorgan Smartretirement. It trades about 0.23 of its potential returns per unit of risk. Jpmorgan Smartretirement 2040 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,209  in Jpmorgan Smartretirement 2040 on September 5, 2024 and sell it today you would earn a total of  110.00  from holding Jpmorgan Smartretirement 2040 or generate 4.98% return on investment over 90 days.

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

Jpmorgan Floating Rate  vs.  Jpmorgan Smartretirement 2040

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.

Jpmorgan Smartretirement

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Smartretirement 2040 are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Smartretirement 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 Floating and Jpmorgan Smartretirement

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

The idea behind Jpmorgan Floating Rate and Jpmorgan Smartretirement 2040 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.