Correlation Between Aama Equity and Jpmorgan Equity
Can any of the company-specific risk be diversified away by investing in both Aama Equity and Jpmorgan Equity 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 Aama Equity and Jpmorgan Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aama Equity Fund and Jpmorgan Equity Fund, you can compare the effects of market volatilities on Aama Equity and Jpmorgan Equity 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 Aama Equity with a short position of Jpmorgan Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aama Equity and Jpmorgan Equity.
Diversification Opportunities for Aama Equity and Jpmorgan Equity
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Aama and Jpmorgan is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Aama Equity Fund and Jpmorgan Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Equity and Aama Equity 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 Aama Equity Fund are associated (or correlated) with Jpmorgan Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Equity has no effect on the direction of Aama Equity i.e., Aama Equity and Jpmorgan Equity go up and down completely randomly.
Pair Corralation between Aama Equity and Jpmorgan Equity
Assuming the 90 days horizon Aama Equity Fund is expected to generate 0.83 times more return on investment than Jpmorgan Equity. However, Aama Equity Fund is 1.21 times less risky than Jpmorgan Equity. It trades about -0.26 of its potential returns per unit of risk. Jpmorgan Equity Fund is currently generating about -0.32 per unit of risk. If you would invest 1,810 in Aama Equity Fund on January 20, 2024 and sell it today you would lose (55.00) from holding Aama Equity Fund or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aama Equity Fund vs. Jpmorgan Equity Fund
Performance |
| Timeline |
| Aama Equity Fund |
| Jpmorgan Equity |
Aama Equity and Jpmorgan Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aama Equity and Jpmorgan Equity
The main advantage of trading using opposite Aama Equity and Jpmorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aama Equity position performs unexpectedly, Jpmorgan Equity 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 Equity will offset losses from the drop in Jpmorgan Equity's long position.| Aama Equity vs. Aama Income Fund | Aama Equity vs. Materials Portfolio Fidelity | Aama Equity vs. Vanguard Energy Fund | Aama Equity vs. Morningstar Alternatives |
| Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 | Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 | Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 | Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 |
Check out your portfolio center.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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