Correlation Between FEDERATED MDT and JPMorgan Chase

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

Diversification Opportunities for FEDERATED MDT and JPMorgan Chase

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between FEDERATED and JPMorgan is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding FEDERATED MDT LARGE and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and FEDERATED MDT 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 FEDERATED MDT LARGE are associated (or correlated) with JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of FEDERATED MDT i.e., FEDERATED MDT and JPMorgan Chase go up and down completely randomly.

Pair Corralation between FEDERATED MDT and JPMorgan Chase

Assuming the 90 days horizon FEDERATED MDT LARGE is expected to under-perform the JPMorgan Chase. In addition to that, FEDERATED MDT is 2.62 times more volatile than JPMorgan Chase Co. It trades about -0.11 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.03 per unit of volatility. If you would invest  13,145  in JPMorgan Chase Co on September 9, 2022 and sell it today you would earn a total of  80.00  from holding JPMorgan Chase Co or generate 0.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

FEDERATED MDT LARGE  vs.  JPMorgan Chase Co

 Performance (%) 
       Timeline  
FEDERATED MDT LARGE 
FEDERATED Performance
0 of 100
Over the last 90 days FEDERATED MDT LARGE has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long term up-swing for the fund investors.

FEDERATED Price Channel

JPMorgan Chase 
JPMorgan Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, JPMorgan Chase may actually be approaching a critical reversion point that can send shares even higher in January 2023.

JPMorgan Price Channel

FEDERATED MDT and JPMorgan Chase Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FEDERATED MDT and JPMorgan Chase

The main advantage of trading using opposite FEDERATED MDT and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEDERATED MDT position performs unexpectedly, JPMorgan Chase 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 Chase will offset losses from the drop in JPMorgan Chase's long position.
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The idea behind FEDERATED MDT LARGE and JPMorgan Chase Co 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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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