Correlation Between Jpmorgan Diversified and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Diversified and Alger Spectra 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 Diversified and Alger Spectra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Diversified Fund and Alger Spectra Fund, you can compare the effects of market volatilities on Jpmorgan Diversified and Alger Spectra 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 Diversified with a short position of Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Diversified and Alger Spectra.
Diversification Opportunities for Jpmorgan Diversified and Alger Spectra
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jpmorgan and Alger is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Diversified Fund and Alger Spectra Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra and Jpmorgan Diversified 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 Diversified Fund are associated (or correlated) with Alger Spectra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Spectra has no effect on the direction of Jpmorgan Diversified i.e., Jpmorgan Diversified and Alger Spectra go up and down completely randomly.
Pair Corralation between Jpmorgan Diversified and Alger Spectra
Assuming the 90 days horizon Jpmorgan Diversified is expected to generate 2.93 times less return on investment than Alger Spectra. But when comparing it to its historical volatility, Jpmorgan Diversified Fund is 2.61 times less risky than Alger Spectra. It trades about 0.27 of its potential returns per unit of risk. Alger Spectra Fund is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,486 in Alger Spectra Fund on April 14, 2025 and sell it today you would earn a total of 754.00 from holding Alger Spectra Fund or generate 30.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Diversified Fund vs. Alger Spectra Fund
Performance |
| Timeline |
| Jpmorgan Diversified |
| Alger Spectra |
Jpmorgan Diversified and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Diversified and Alger Spectra
The main advantage of trading using opposite Jpmorgan Diversified and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Diversified position performs unexpectedly, Alger Spectra 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 Alger Spectra will offset losses from the drop in Alger Spectra's long position.The idea behind Jpmorgan Diversified Fund and Alger Spectra Fund 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 the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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