Correlation Between Growth Fund and JP Morgan

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Can any of the company-specific risk be diversified away by investing in both Growth Fund and JP Morgan 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 Growth Fund and JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Growth Fund and JP Morgan Chase, you can compare the effects of market volatilities on Growth Fund and JP Morgan 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 Growth Fund with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and JP Morgan.

Diversification Opportunities for Growth Fund and JP Morgan

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Growth and JP Morgan is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding The Growth Fund and JP Morgan Chase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Chase and Growth Fund 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 The Growth Fund are associated (or correlated) with JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Chase has no effect on the direction of Growth Fund i.e., Growth Fund and JP Morgan go up and down completely randomly.

Pair Corralation between Growth Fund and JP Morgan

Assuming the 90 days horizon The Growth Fund is expected to under-perform the JP Morgan. In addition to that, Growth Fund is 1.01 times more volatile than JP Morgan Chase. It trades about -0.03 of its total potential returns per unit of risk. JP Morgan Chase is currently generating about -0.01 per unit of volatility. If you would invest  15,871  in JP Morgan Chase on August 30, 2022 and sell it today you would lose (2,197)  from holding JP Morgan Chase or give up 13.84% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

The Growth Fund  vs.  JP Morgan Chase

 Performance (%) 
       Timeline  
Growth Fund 
Growth Performance
0 of 100
Over the last 90 days The Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Growth Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Growth Price Channel

JP Morgan Chase 
JP Morgan Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JP Morgan Chase are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, JP Morgan revealed solid returns over the last few months and may actually be approaching a breakup point.

JP Morgan Price Channel

Growth Fund and JP Morgan Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Growth Fund and JP Morgan

The main advantage of trading using opposite Growth Fund and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, JP Morgan 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 JP Morgan will offset losses from the drop in JP Morgan's long position.
Growth Fund vs. The Growth Fund
Growth Fund vs. The Growth Fund
Growth Fund vs. The Growth Fund
Growth Fund vs. The Growth Fund
The idea behind The Growth Fund and JP Morgan Chase 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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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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