Correlation Between JP Morgan and Global X
Can any of the company-specific risk be diversified away by investing in both JP Morgan and Global X 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 JP Morgan and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JP Morgan Exchange Traded and Global X Infrastructure, you can compare the effects of market volatilities on JP Morgan and Global X 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 JP Morgan with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of JP Morgan and Global X.
Diversification Opportunities for JP Morgan and Global X
Excellent diversification
The 3 months correlation between BLLD and Global is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Exchange Traded and Global X Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Infrastructure and JP Morgan 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 JP Morgan Exchange Traded are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Infrastructure has no effect on the direction of JP Morgan i.e., JP Morgan and Global X go up and down completely randomly.
Pair Corralation between JP Morgan and Global X
Given the investment horizon of 90 days JP Morgan Exchange Traded is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, JP Morgan Exchange Traded is 1.84 times less risky than Global X. The etf trades about -0.04 of its potential returns per unit of risk. The Global X Infrastructure is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,150 in Global X Infrastructure on August 30, 2024 and sell it today you would earn a total of 409.00 from holding Global X Infrastructure or generate 9.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JP Morgan Exchange Traded vs. Global X Infrastructure
Performance |
| Timeline |
| JP Morgan Exchange |
| Global X Infrastructure |
JP Morgan and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JP Morgan and Global X
The main advantage of trading using opposite JP Morgan and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JP Morgan position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| JP Morgan vs. Freedom Day Dividend | JP Morgan vs. Franklin Templeton ETF | JP Morgan vs. iShares MSCI China | JP Morgan vs. Tidal Trust II |
| Global X vs. iShares Infrastructure ETF | Global X vs. Global X Cloud | Global X vs. Global X Cybersecurity | Global X vs. Invesco Dynamic Leisure |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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