Correlation Between Small Cap and Jpmorgan Smartretirement

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

By analyzing existing cross correlation between Small Cap Stock and Jpmorgan Smartretirement 2030, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Jpmorgan Smartretirement.

Diversification Opportunities for Small Cap and Jpmorgan Smartretirement

0.64

Correlation Coefficient

Small Cap  Jpmorgan Smartretirement

Poor diversification

The 3 months correlation between Small and JPMORGAN is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock and Jpmorgan Smartretirement 2030 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement and Small Cap 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 Small Cap Stock 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 Small Cap i.e., Small Cap and Jpmorgan Smartretirement go up and down completely randomly.

Pair Corralation between Small Cap and Jpmorgan Smartretirement

Assuming the 90 days horizon Small Cap Stock is expected to generate 2.63 times more return on investment than Jpmorgan Smartretirement. However, Small Cap is 2.63 times more volatile than Jpmorgan Smartretirement 2030. It trades about 0.23 of its potential returns per unit of risk. Jpmorgan Smartretirement 2030 is currently generating about 0.34 per unit of risk. If you would invest  1,136  in Small Cap Stock on April 23, 2025 and sell it today you would earn a total of  187.00  from holding Small Cap Stock or generate 16.46% return on investment over 90 days.

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

Small Cap Stock  vs.  Jpmorgan Smartretirement 2030

Small Cap Stock

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Stock are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Small Cap showed solid returns over the last few months and may actually be approaching a breakup point.

Jpmorgan Smartretirement

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Smartretirement 2030 are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Jpmorgan Smartretirement may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Small Cap and Jpmorgan Smartretirement

The main advantage of trading using opposite Small Cap and Jpmorgan Smartretirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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 Small Cap Stock and Jpmorgan Smartretirement 2030 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.