Correlation Between JPMorgan Fundamental and Advisor Managed

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

Diversification Opportunities for JPMorgan Fundamental and Advisor Managed

0.95

Correlation Coefficient

JPMorgan Fundamental  Advisor Managed

Almost no diversification

The 3 months correlation between JPMorgan and Advisor is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Fundamental Data and Advisor Managed Portfolios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advisor Managed Port 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 Advisor Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advisor Managed Port has no effect on the direction of JPMorgan Fundamental i.e., JPMorgan Fundamental and Advisor Managed go up and down completely randomly.

Pair Corralation between JPMorgan Fundamental and Advisor Managed

Given the investment horizon of 90 days JPMorgan Fundamental is expected to generate 2.11 times less return on investment than Advisor Managed. But when comparing it to its historical volatility, JPMorgan Fundamental Data is 1.89 times less risky than Advisor Managed. It trades about 0.26 of its potential returns per unit of risk. Advisor Managed Portfolios is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  2,412  in Advisor Managed Portfolios on September 5, 2024 and sell it today you would earn a total of  682.00  from holding Advisor Managed Portfolios or generate 28.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

JPMorgan Fundamental Data  vs.  Advisor Managed Portfolios

JPMorgan Fundamental Data

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Fundamental Data are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, JPMorgan Fundamental may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Advisor Managed Port

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Advisor Managed Portfolios are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical and fundamental indicators, Advisor Managed reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Fundamental and Advisor Managed

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

The idea behind JPMorgan Fundamental Data and Advisor Managed Portfolios 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.