Correlation Between Jpmorgan High and Sdit Short

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

Diversification Opportunities for Jpmorgan High and Sdit Short

0.05

Correlation Coefficient

Jpmorgan High  Sdit Short

Significant diversification

The 3 months correlation between Jpmorgan and Sdit is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan High Yield and Sdit Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sdit Short Duration 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 Sdit Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sdit Short Duration has no effect on the direction of Jpmorgan High i.e., Jpmorgan High and Sdit Short go up and down completely randomly.

Pair Corralation between Jpmorgan High and Sdit Short

Assuming the 90 days horizon Jpmorgan High Yield is expected to generate 1.68 times more return on investment than Sdit Short. However, Jpmorgan High is 1.68 times more volatile than Sdit Short Duration. It trades about 0.14 of its potential returns per unit of risk. Sdit Short Duration is currently generating about 0.11 per unit of risk. If you would invest  548.00  in Jpmorgan High Yield on September 15, 2024 and sell it today you would earn a total of  115.00  from holding Jpmorgan High Yield or generate 20.99% return on investment over 90 days.

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

Jpmorgan High Yield  vs.  Sdit Short Duration

Jpmorgan High Yield

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan High Yield 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 High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sdit Short Duration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sdit Short Duration has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Sdit Short 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 Sdit Short

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

The idea behind Jpmorgan High Yield and Sdit Short Duration 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.