Correlation Between Dimensional International and JPMorgan Global
Can any of the company-specific risk be diversified away by investing in both Dimensional International and JPMorgan Global 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 Dimensional International and JPMorgan Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional International High and JPMorgan Global Select, you can compare the effects of market volatilities on Dimensional International and JPMorgan Global 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 Dimensional International with a short position of JPMorgan Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional International and JPMorgan Global.
Diversification Opportunities for Dimensional International and JPMorgan Global
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dimensional and JPMorgan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional International High and JPMorgan Global Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Global Select and Dimensional International 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 Dimensional International High are associated (or correlated) with JPMorgan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Global Select has no effect on the direction of Dimensional International i.e., Dimensional International and JPMorgan Global go up and down completely randomly.
Pair Corralation between Dimensional International and JPMorgan Global
Given the investment horizon of 90 days Dimensional International High is expected to generate 1.08 times more return on investment than JPMorgan Global. However, Dimensional International is 1.08 times more volatile than JPMorgan Global Select. It trades about 0.1 of its potential returns per unit of risk. JPMorgan Global Select is currently generating about -0.07 per unit of risk. If you would invest 2,659 in Dimensional International High on December 1, 2024 and sell it today you would earn a total of 40.00 from holding Dimensional International High or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimensional International High vs. JPMorgan Global Select
Performance |
| Timeline |
| Dimensional International |
| JPMorgan Global Select |
Dimensional International and JPMorgan Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional International and JPMorgan Global
The main advantage of trading using opposite Dimensional International and JPMorgan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional International position performs unexpectedly, JPMorgan Global 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 Global will offset losses from the drop in JPMorgan Global's long position.The idea behind Dimensional International High and JPMorgan Global Select 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.
| JPMorgan Global vs. FT Vest Equity | JPMorgan Global vs. Northern Lights | JPMorgan Global vs. Dimensional International High | JPMorgan Global vs. First Trust Exchange Traded |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |