Correlation Between Jpmorgan Smartretirement and American Funds
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Smartretirement and American Funds 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 American Funds 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 American Funds 2035, you can compare the effects of market volatilities on Jpmorgan Smartretirement and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement and American Funds.
Diversification Opportunities for Jpmorgan Smartretirement and American Funds
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Jpmorgan and American is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement 2035 and American Funds 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2035 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2035 has no effect on the direction of Jpmorgan Smartretirement i.e., Jpmorgan Smartretirement and American Funds go up and down completely randomly.
Pair Corralation between Jpmorgan Smartretirement and American Funds
Assuming the 90 days horizon Jpmorgan Smartretirement 2035 is expected to under-perform the American Funds. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jpmorgan Smartretirement 2035 is 1.01 times less risky than American Funds. The mutual fund trades about -0.17 of its potential returns per unit of risk. The American Funds 2035 is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 1,810 in American Funds 2035 on January 25, 2024 and sell it today you would lose (36.00) from holding American Funds 2035 or give up 1.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Smartretirement 2035 vs. American Funds 2035
Performance |
| Timeline |
| Jpmorgan Smartretirement |
| American Funds 2035 |
Jpmorgan Smartretirement and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Smartretirement and American Funds
The main advantage of trading using opposite Jpmorgan Smartretirement and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Smartretirement position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.The idea behind Jpmorgan Smartretirement 2035 and American Funds 2035 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.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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