Correlation Between Jpmorgan Value and Invesco Growth

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

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

Diversification Opportunities for Jpmorgan Value and Invesco Growth

0.88

Correlation Coefficient

Jpmorgan Value  Invesco Growth

Very poor diversification

The 3 months correlation between Jpmorgan and Invesco is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Value Advantage and Invesco Growth And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Growth And and Jpmorgan Value 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 Value Advantage are associated (or correlated) with Invesco Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Growth And has no effect on the direction of Jpmorgan Value i.e., Jpmorgan Value and Invesco Growth go up and down completely randomly.

Pair Corralation between Jpmorgan Value and Invesco Growth

Assuming the 90 days horizon Jpmorgan Value Advantage is expected to under-perform the Invesco Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jpmorgan Value Advantage is 1.07 times less risky than Invesco Growth. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Invesco Growth And is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  2,271  in Invesco Growth And on September 18, 2024 and sell it today you would lose (64.00) from holding Invesco Growth And or give up 2.82% of portfolio value over 90 days.

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

Jpmorgan Value Advantage  vs.  Invesco Growth And

Jpmorgan Value Advantage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Value Advantage has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Invesco Growth And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Growth And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Invesco Growth 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 Value and Invesco Growth

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

The idea behind Jpmorgan Value Advantage and Invesco Growth And 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.