Correlation Between SPDR SPASX and JPMorgan Global
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX 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 SPDR SPASX and JPMorgan Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SPASX 200 and JPMorgan Global Equity, you can compare the effects of market volatilities on SPDR SPASX 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 SPDR SPASX with a short position of JPMorgan Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and JPMorgan Global.
Diversification Opportunities for SPDR SPASX and JPMorgan Global
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and JPMorgan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and JPMorgan Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Global Equity and SPDR SPASX 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 SPDR SPASX 200 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 Equity has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and JPMorgan Global go up and down completely randomly.
Pair Corralation between SPDR SPASX and JPMorgan Global
Assuming the 90 days trading horizon SPDR SPASX 200 is expected to generate 1.06 times more return on investment than JPMorgan Global. However, SPDR SPASX is 1.06 times more volatile than JPMorgan Global Equity. It trades about 0.11 of its potential returns per unit of risk. JPMorgan Global Equity is currently generating about 0.07 per unit of risk. If you would invest 2,195 in SPDR SPASX 200 on August 26, 2024 and sell it today you would earn a total of 498.00 from holding SPDR SPASX 200 or generate 22.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 32.0% |
| Values | Daily Returns |
SPDR SPASX 200 vs. JPMorgan Global Equity
Performance |
| Timeline |
| SPDR SPASX 200 |
| JPMorgan Global Equity |
SPDR SPASX and JPMorgan Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and JPMorgan Global
The main advantage of trading using opposite SPDR SPASX and JPMorgan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX 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.| SPDR SPASX vs. CD Private Equity | SPDR SPASX vs. Ecofibre | SPDR SPASX vs. iShares Global Healthcare | SPDR SPASX vs. Ridley |
| JPMorgan Global vs. CD Private Equity | JPMorgan Global vs. SPDR SPASX 200 | JPMorgan Global vs. Ecofibre | JPMorgan Global vs. iShares Global Healthcare |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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