Correlation Between JPMorgan Fundamental and Innovator Growth

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

By analyzing existing cross correlation between JPMorgan Fundamental Data and Innovator Growth 100 Power, you can compare the effects of market volatilities on JPMorgan Fundamental and Innovator 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 Fundamental with a short position of Innovator Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Fundamental and Innovator Growth.

Diversification Opportunities for JPMorgan Fundamental and Innovator Growth

0.92

Correlation Coefficient

JPMorgan Fundamental  Innovator Growth

Almost no diversification

The 3 months correlation between JPMorgan and Innovator is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Fundamental Data and Innovator Growth 100 Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Growth 100 and JPMorgan Fundamental 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 Fundamental Data are associated (or correlated) with Innovator Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Growth 100 has no effect on the direction of JPMorgan Fundamental i.e., JPMorgan Fundamental and Innovator Growth go up and down completely randomly.

Pair Corralation between JPMorgan Fundamental and Innovator Growth

Given the investment horizon of 90 days JPMorgan Fundamental Data is expected to generate 1.46 times more return on investment than Innovator Growth. However, JPMorgan Fundamental is 1.46 times more volatile than Innovator Growth 100 Power. It trades about 0.18 of its potential returns per unit of risk. Innovator Growth 100 Power is currently generating about 0.21 per unit of risk. If you would invest  5,415  in JPMorgan Fundamental Data on September 15, 2024 and sell it today you would earn a total of  414.00  from holding JPMorgan Fundamental Data or generate 7.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

JPMorgan Fundamental Data  vs.  Innovator Growth 100 Power

JPMorgan Fundamental Data

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Fundamental Data are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, JPMorgan Fundamental may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Innovator Growth 100

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator Growth 100 Power are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Innovator Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JPMorgan Fundamental and Innovator Growth

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

The idea behind JPMorgan Fundamental Data and Innovator Growth 100 Power 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.