Correlation Between Jpmorgan Smartretirement and Equity Growth

Can any of the company-specific risk be diversified away by investing in both Jpmorgan Smartretirement and Equity 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 Smartretirement and Equity Growth 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 Equity Growth Fund, you can compare the effects of market volatilities on Jpmorgan Smartretirement and Equity 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 Smartretirement with a short position of Equity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement and Equity Growth.

Diversification Opportunities for Jpmorgan Smartretirement and Equity Growth

0.67

Correlation Coefficient

Jpmorgan Smartretirement  Equity Growth

Poor diversification

The 3 months correlation between Jpmorgan and Equity is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement 2035 and Equity Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth 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 Equity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth has no effect on the direction of Jpmorgan Smartretirement i.e., Jpmorgan Smartretirement and Equity Growth go up and down completely randomly.

Pair Corralation between Jpmorgan Smartretirement and Equity Growth

Assuming the 90 days horizon Jpmorgan Smartretirement 2035 is expected to under-perform the Equity Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jpmorgan Smartretirement 2035 is 1.57 times less risky than Equity Growth. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Equity Growth Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,241  in Equity Growth Fund on September 19, 2024 and sell it today you would earn a total of  118.00  from holding Equity Growth Fund or generate 3.64% return on investment over 90 days.

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

Jpmorgan Smartretirement 2035  vs.  Equity Growth Fund

Jpmorgan Smartretirement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Smartretirement 2035 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Jpmorgan Smartretirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Equity Growth

Risk-Adjusted Performance

6 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Growth Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Equity Growth 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 Equity Growth

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

The idea behind Jpmorgan Smartretirement 2035 and Equity Growth 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..