Correlation Between Jpmorgan Small and Jpmorgan Research

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

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

Diversification Opportunities for Jpmorgan Small and Jpmorgan Research

0.82

Correlation Coefficient

Jpmorgan Small  Jpmorgan Research

Very poor diversification

The 3 months correlation between Jpmorgan and Jpmorgan is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Small Cap and Jpmorgan Research Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Research Market and Jpmorgan Small 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 Small Cap are associated (or correlated) with Jpmorgan Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Research Market has no effect on the direction of Jpmorgan Small i.e., Jpmorgan Small and Jpmorgan Research go up and down completely randomly.

Pair Corralation between Jpmorgan Small and Jpmorgan Research

Assuming the 90 days horizon Jpmorgan Small Cap is expected to generate 6.43 times more return on investment than Jpmorgan Research. However, Jpmorgan Small is 6.43 times more volatile than Jpmorgan Research Market. It trades about 0.06 of its potential returns per unit of risk. Jpmorgan Research Market is currently generating about 0.26 per unit of risk. If you would invest  988.00  in Jpmorgan Small Cap on September 3, 2024 and sell it today you would earn a total of  116.00  from holding Jpmorgan Small Cap or generate 11.74% return on investment over 90 days.

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

Jpmorgan Small Cap  vs.  Jpmorgan Research Market

Jpmorgan Small Cap

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Small Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Jpmorgan Small showed solid returns over the last few months and may actually be approaching a breakup point.

Jpmorgan Research Market

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Research Market are ranked lower than 31 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Research 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 Small and Jpmorgan Research

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

The idea behind Jpmorgan Small Cap and Jpmorgan Research Market 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.