Correlation Between Jpmorgan Smartretirement and Pace International

Can any of the company-specific risk be diversified away by investing in both Jpmorgan Smartretirement and Pace International 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 Pace International 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 Pace International Emerging, you can compare the effects of market volatilities on Jpmorgan Smartretirement and Pace International 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 Pace International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement and Pace International.

Diversification Opportunities for Jpmorgan Smartretirement and Pace International

0.07

Correlation Coefficient

Jpmorgan Smartretirement  Pace International

Significant diversification

The 3 months correlation between Jpmorgan and Pace is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement 2035 and Pace International Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace International 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 Pace International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace International has no effect on the direction of Jpmorgan Smartretirement i.e., Jpmorgan Smartretirement and Pace International go up and down completely randomly.

Pair Corralation between Jpmorgan Smartretirement and Pace International

Assuming the 90 days horizon Jpmorgan Smartretirement is expected to generate 12.83 times less return on investment than Pace International. But when comparing it to its historical volatility, Jpmorgan Smartretirement 2035 is 1.94 times less risky than Pace International. It trades about 0.01 of its potential returns per unit of risk. Pace International Emerging is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,314  in Pace International Emerging on September 17, 2024 and sell it today you would earn a total of  42.00  from holding Pace International Emerging or generate 3.2% return on investment over 90 days.

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

Jpmorgan Smartretirement 2035  vs.  Pace International Emerging

Jpmorgan Smartretirement

Risk-Adjusted Performance

0 of 100

Modest

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.

Pace International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pace International Emerging are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Pace International 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 Pace International

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

The idea behind Jpmorgan Smartretirement 2035 and Pace International Emerging 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.