Correlation Between EA Series and JPMorgan Fundamental

Can any of the company-specific risk be diversified away by investing in both EA Series and JPMorgan Fundamental 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 EA Series and JPMorgan Fundamental into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EA Series Trust and JPMorgan Fundamental Data, you can compare the effects of market volatilities on EA Series and JPMorgan Fundamental 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 EA Series with a short position of JPMorgan Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and JPMorgan Fundamental.

Diversification Opportunities for EA Series and JPMorgan Fundamental

-0.06

Correlation Coefficient

EA Series  JPMorgan Fundamental

Good diversification

The 3 months correlation between MDLV and JPMorgan is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and JPMorgan Fundamental Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Fundamental Data and EA Series 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 EA Series Trust are associated (or correlated) with JPMorgan Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Fundamental Data has no effect on the direction of EA Series i.e., EA Series and JPMorgan Fundamental go up and down completely randomly.

Pair Corralation between EA Series and JPMorgan Fundamental

Given the investment horizon of 90 days EA Series is expected to generate 1.35 times less return on investment than JPMorgan Fundamental. But when comparing it to its historical volatility, EA Series Trust is 1.33 times less risky than JPMorgan Fundamental. It trades about 0.29 of its potential returns per unit of risk. JPMorgan Fundamental Data is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  4,992  in JPMorgan Fundamental Data on July 5, 2024 and sell it today you would earn a total of  475.00  from holding JPMorgan Fundamental Data or generate 9.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	64.06%
Values	Daily Returns

EA Series Trust  vs.  JPMorgan Fundamental Data

EA Series Trust

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, EA Series may actually be approaching a critical reversion point that can send shares even higher in November 2024.

JPMorgan Fundamental Data

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Fundamental Data are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental indicators, JPMorgan Fundamental unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EA Series and JPMorgan Fundamental

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

The idea behind EA Series Trust and JPMorgan Fundamental Data 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.