Correlation Between Leverage Shares and JPMorgan Ireland
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and JPMorgan Ireland 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 Leverage Shares and JPMorgan Ireland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 3x and JPMorgan Ireland ICAV, you can compare the effects of market volatilities on Leverage Shares and JPMorgan Ireland 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 Leverage Shares with a short position of JPMorgan Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and JPMorgan Ireland.
Diversification Opportunities for Leverage Shares and JPMorgan Ireland
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Leverage and JPMorgan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x and JPMorgan Ireland ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Ireland ICAV and Leverage Shares 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 Leverage Shares 3x are associated (or correlated) with JPMorgan Ireland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Ireland ICAV has no effect on the direction of Leverage Shares i.e., Leverage Shares and JPMorgan Ireland go up and down completely randomly.
Pair Corralation between Leverage Shares and JPMorgan Ireland
Assuming the 90 days trading horizon Leverage Shares 3x is expected to generate 34.01 times more return on investment than JPMorgan Ireland. However, Leverage Shares is 34.01 times more volatile than JPMorgan Ireland ICAV. It trades about 0.39 of its potential returns per unit of risk. JPMorgan Ireland ICAV is currently generating about 0.18 per unit of risk. If you would invest 1,159,060 in Leverage Shares 3x on September 2, 2024 and sell it today you would earn a total of 2,593,015 from holding Leverage Shares 3x or generate 223.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 3x vs. JPMorgan Ireland ICAV
Performance |
| Timeline |
| Leverage Shares 3x |
| JPMorgan Ireland ICAV |
Leverage Shares and JPMorgan Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and JPMorgan Ireland
The main advantage of trading using opposite Leverage Shares and JPMorgan Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, JPMorgan Ireland 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 Ireland will offset losses from the drop in JPMorgan Ireland's long position.| Leverage Shares vs. WisdomTree Natural Gas | Leverage Shares vs. WisdomTree Natural Gas | Leverage Shares vs. WisdomTree SP 500 | Leverage Shares vs. GraniteShares 3x Short |
| JPMorgan Ireland vs. GraniteShares 3x Short | JPMorgan Ireland vs. WisdomTree Natural Gas | JPMorgan Ireland vs. Leverage Shares 3x | JPMorgan Ireland vs. WisdomTree Natural Gas |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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