Correlation Between Jpmorgan Smartretirement and Jpmorgan Diversified

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

By analyzing existing cross correlation between Jpmorgan Smartretirement 2035 and Jpmorgan Diversified Fund, you can compare the effects of market volatilities on Jpmorgan Smartretirement and Jpmorgan Diversified 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 Smartretirement with a short position of Jpmorgan Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement and Jpmorgan Diversified.

Diversification Opportunities for Jpmorgan Smartretirement and Jpmorgan Diversified

0.88

Correlation Coefficient

Jpmorgan Smartretirement  Jpmorgan Diversified

Very poor diversification

The 3 months correlation between Jpmorgan and Jpmorgan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement 2035 and Jpmorgan Diversified Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Diversified and Jpmorgan Smartretirement 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 Smartretirement 2035 are associated (or correlated) with Jpmorgan Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Diversified has no effect on the direction of Jpmorgan Smartretirement i.e., Jpmorgan Smartretirement and Jpmorgan Diversified go up and down completely randomly.

Pair Corralation between Jpmorgan Smartretirement and Jpmorgan Diversified

Assuming the 90 days horizon Jpmorgan Smartretirement 2035 is expected to generate 0.96 times more return on investment than Jpmorgan Diversified. However, Jpmorgan Smartretirement 2035 is 1.05 times less risky than Jpmorgan Diversified. It trades about 0.12 of its potential returns per unit of risk. Jpmorgan Diversified Fund is currently generating about 0.1 per unit of risk. If you would invest  2,010  in Jpmorgan Smartretirement 2035 on September 12, 2024 and sell it today you would earn a total of  71.00  from holding Jpmorgan Smartretirement 2035 or generate 3.53% return on investment over 90 days.

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

Jpmorgan Smartretirement 2035  vs.  Jpmorgan Diversified Fund

Jpmorgan Smartretirement

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Smartretirement 2035 are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Jpmorgan Smartretirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan Diversified

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Diversified Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Diversified 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 Smartretirement and Jpmorgan Diversified

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

The idea behind Jpmorgan Smartretirement 2035 and Jpmorgan Diversified Fund 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.