Correlation Between Jpmorgan High and Payden High

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

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

Diversification Opportunities for Jpmorgan High and Payden High

0.76

Correlation Coefficient

Jpmorgan High  Payden High

Poor diversification

The 3 months correlation between Jpmorgan and Payden is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan High Yield and Payden High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden High Income and Jpmorgan High 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 High Yield are associated (or correlated) with Payden High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden High Income has no effect on the direction of Jpmorgan High i.e., Jpmorgan High and Payden High go up and down completely randomly.

Pair Corralation between Jpmorgan High and Payden High

Assuming the 90 days horizon Jpmorgan High Yield is expected to under-perform the Payden High. In addition to that, Jpmorgan High is 1.23 times more volatile than Payden High Income. It trades about -0.1 of its total potential returns per unit of risk. Payden High Income is currently generating about -0.09 per unit of volatility. If you would invest  641.00  in Payden High Income on September 30, 2024 and sell it today you would lose (6.00) from holding Payden High Income or give up 0.94% of portfolio value over 90 days.

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

Jpmorgan High Yield  vs.  Payden High Income

Jpmorgan High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

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

Payden High Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Payden High Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Payden High 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 High and Payden High

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

The idea behind Jpmorgan High Yield and Payden High Income 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.