Correlation Between James Balanced and Jpmorgan Smartretirement

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

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

Diversification Opportunities for James Balanced and Jpmorgan Smartretirement

0.99

Correlation Coefficient

James Balanced  Jpmorgan Smartretirement

No risk reduction

The 3 months correlation between James and Jpmorgan is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Jpmorgan Smartretirement 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement and James Balanced 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 James Balanced Golden are associated (or correlated) with Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of James Balanced i.e., James Balanced and Jpmorgan Smartretirement go up and down completely randomly.

Pair Corralation between James Balanced and Jpmorgan Smartretirement

Assuming the 90 days horizon James Balanced is expected to generate 3.38 times less return on investment than Jpmorgan Smartretirement. But when comparing it to its historical volatility, James Balanced Golden is 1.17 times less risky than Jpmorgan Smartretirement. It trades about 0.01 of its potential returns per unit of risk. Jpmorgan Smartretirement 2035 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,123  in Jpmorgan Smartretirement 2035 on August 13, 2024 and sell it today you would earn a total of  7.00  from holding Jpmorgan Smartretirement 2035 or generate 0.33% return on investment over 90 days.

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

James Balanced Golden  vs.  Jpmorgan Smartretirement 2035

James Balanced Golden

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in James Balanced Golden are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, James Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan Smartretirement

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Smartretirement 2035 are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. 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.

Pair Trading with James Balanced and Jpmorgan Smartretirement

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

The idea behind James Balanced Golden and Jpmorgan Smartretirement 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.