Correlation Between Jpmorgan Smartretirement and State Farm

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

By analyzing existing cross correlation between Jpmorgan Smartretirement 2030 and State Farm Growth, you can compare the effects of market volatilities on Jpmorgan Smartretirement and State Farm 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 State Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement and State Farm.

Diversification Opportunities for Jpmorgan Smartretirement and State Farm

0.96

Correlation Coefficient

Jpmorgan Smartretirement  State Farm

Almost no diversification

The 3 months correlation between Jpmorgan and State is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement 2030 and State Farm Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Farm Growth 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 2030 are associated (or correlated) with State Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Farm Growth has no effect on the direction of Jpmorgan Smartretirement i.e., Jpmorgan Smartretirement and State Farm go up and down completely randomly.

Pair Corralation between Jpmorgan Smartretirement and State Farm

Assuming the 90 days horizon Jpmorgan Smartretirement 2030 is expected to generate 0.62 times more return on investment than State Farm. However, Jpmorgan Smartretirement 2030 is 1.61 times less risky than State Farm. It trades about -0.23 of its potential returns per unit of risk. State Farm Growth is currently generating about -0.2 per unit of risk. If you would invest  1,838  in Jpmorgan Smartretirement 2030 on January 28, 2024 and sell it today you would lose (45.00) from holding Jpmorgan Smartretirement 2030 or give up 2.45% 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 2030  vs.  State Farm Growth

Jpmorgan Smartretirement

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Smartretirement 2030 are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Smartretirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

State Farm Growth

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in State Farm Growth are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, State Farm is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jpmorgan Smartretirement and State Farm

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

The idea behind Jpmorgan Smartretirement 2030 and State Farm Growth 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.