Correlation Between Dow Jones and JPMorgan ETFs
Can any of the company-specific risk be diversified away by investing in both Dow Jones and JPMorgan ETFs 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 Dow Jones and JPMorgan ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and JPMorgan ETFs ICAV, you can compare the effects of market volatilities on Dow Jones and JPMorgan ETFs 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 Dow Jones with a short position of JPMorgan ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and JPMorgan ETFs.
Diversification Opportunities for Dow Jones and JPMorgan ETFs
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and JPMorgan is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and JPMorgan ETFs ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan ETFs ICAV and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with JPMorgan ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan ETFs ICAV has no effect on the direction of Dow Jones i.e., Dow Jones and JPMorgan ETFs go up and down completely randomly.
Pair Corralation between Dow Jones and JPMorgan ETFs
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.02 times more return on investment than JPMorgan ETFs. However, Dow Jones is 1.02 times more volatile than JPMorgan ETFs ICAV. It trades about 0.11 of its potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about 0.06 per unit of risk. If you would invest 3,406,633 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 1,084,432 from holding Dow Jones Industrial or generate 31.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.67% |
| Values | Daily Returns |
Dow Jones Industrial vs. JPMorgan ETFs ICAV
Performance |
| Timeline |
Dow Jones and JPMorgan ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
JPMorgan ETFs ICAV
Pair trading matchups for JPMorgan ETFs
Pair Trading with Dow Jones and JPMorgan ETFs
The main advantage of trading using opposite Dow Jones and JPMorgan ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, JPMorgan ETFs 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 ETFs will offset losses from the drop in JPMorgan ETFs' long position.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
| JPMorgan ETFs vs. JPMorgan ETFs ICAV | JPMorgan ETFs vs. JPMorgan ETFs ICAV | JPMorgan ETFs vs. JPMorgan ETFs Ireland | JPMorgan ETFs vs. JPMorgan ETFs Ireland |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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