Correlation Between WisdomTree and JPM AC
Can any of the company-specific risk be diversified away by investing in both WisdomTree and JPM AC 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 WisdomTree and JPM AC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree SP 500 and JPM AC Asia, you can compare the effects of market volatilities on WisdomTree and JPM AC 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 WisdomTree with a short position of JPM AC. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree and JPM AC.
Diversification Opportunities for WisdomTree and JPM AC
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and JPM is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree SP 500 and JPM AC Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM AC Asia and WisdomTree 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 WisdomTree SP 500 are associated (or correlated) with JPM AC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM AC Asia has no effect on the direction of WisdomTree i.e., WisdomTree and JPM AC go up and down completely randomly.
Pair Corralation between WisdomTree and JPM AC
Assuming the 90 days trading horizon WisdomTree SP 500 is expected to under-perform the JPM AC. In addition to that, WisdomTree is 2.94 times more volatile than JPM AC Asia. It trades about -0.02 of its total potential returns per unit of risk. JPM AC Asia is currently generating about 0.07 per unit of volatility. If you would invest 163,888 in JPM AC Asia on November 28, 2024 and sell it today you would earn a total of 11,462 from holding JPM AC Asia or generate 6.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree SP 500 vs. JPM AC Asia
Performance |
| Timeline |
| WisdomTree SP 500 |
| JPM AC Asia |
WisdomTree and JPM AC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree and JPM AC
The main advantage of trading using opposite WisdomTree and JPM AC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree position performs unexpectedly, JPM AC 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 JPM AC will offset losses from the drop in JPM AC's long position.| WisdomTree vs. WisdomTree Zinc | WisdomTree vs. WisdomTree Brent Crude | WisdomTree vs. WisdomTree Aluminium 2x | WisdomTree vs. WisdomTree Enhanced Commodity |
| JPM AC vs. SP 500 VIX | JPM AC vs. WisdomTree Natural Gas | JPM AC vs. Leverage Shares 2x | JPM AC vs. WisdomTree Silver 3x |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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