Correlation Between Xtrackers California and JPMorgan Active
Can any of the company-specific risk be diversified away by investing in both Xtrackers California and JPMorgan Active 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 Xtrackers California and JPMorgan Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers California Municipal and JPMorgan Active Value, you can compare the effects of market volatilities on Xtrackers California and JPMorgan Active 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 Xtrackers California with a short position of JPMorgan Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers California and JPMorgan Active.
Diversification Opportunities for Xtrackers California and JPMorgan Active
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and JPMorgan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers California Municipal and JPMorgan Active Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Active Value and Xtrackers California 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 Xtrackers California Municipal are associated (or correlated) with JPMorgan Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Active Value has no effect on the direction of Xtrackers California i.e., Xtrackers California and JPMorgan Active go up and down completely randomly.
Pair Corralation between Xtrackers California and JPMorgan Active
Allowing for the 90-day total investment horizon Xtrackers California Municipal is expected to under-perform the JPMorgan Active. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers California Municipal is 2.24 times less risky than JPMorgan Active. The etf trades about -0.1 of its potential returns per unit of risk. The JPMorgan Active Value is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 6,391 in JPMorgan Active Value on November 4, 2024 and sell it today you would earn a total of 267.00 from holding JPMorgan Active Value or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Xtrackers California Municipal vs. JPMorgan Active Value
Performance |
| Timeline |
| Xtrackers California |
| JPMorgan Active Value |
Xtrackers California and JPMorgan Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers California and JPMorgan Active
The main advantage of trading using opposite Xtrackers California and JPMorgan Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers California position performs unexpectedly, JPMorgan Active 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 Active will offset losses from the drop in JPMorgan Active's long position.| Xtrackers California vs. VanEck Vectors Moodys | Xtrackers California vs. Valued Advisers Trust | Xtrackers California vs. Principal Exchange Traded Funds | Xtrackers California vs. Vanguard ESG Corporate |
| JPMorgan Active vs. Global X Funds | JPMorgan Active vs. Dell Technologies | JPMorgan Active vs. Juniper Networks |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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