Correlation Between ProShares UltraShort and JPMorgan Diversified
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and JPMorgan Diversified 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 ProShares UltraShort and JPMorgan Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort MSCI and JPMorgan Diversified Return, you can compare the effects of market volatilities on ProShares UltraShort and JPMorgan Diversified 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 ProShares UltraShort with a short position of JPMorgan Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and JPMorgan Diversified.
Diversification Opportunities for ProShares UltraShort and JPMorgan Diversified
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and JPMorgan is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort MSCI and JPMorgan Diversified Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Diversified and ProShares UltraShort 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 ProShares UltraShort MSCI are associated (or correlated) with JPMorgan Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Diversified has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and JPMorgan Diversified go up and down completely randomly.
Pair Corralation between ProShares UltraShort and JPMorgan Diversified
Considering the 90-day investment horizon ProShares UltraShort MSCI is expected to under-perform the JPMorgan Diversified. In addition to that, ProShares UltraShort is 2.74 times more volatile than JPMorgan Diversified Return. It trades about -0.12 of its total potential returns per unit of risk. JPMorgan Diversified Return is currently generating about 0.25 per unit of volatility. If you would invest 5,370 in JPMorgan Diversified Return on November 4, 2024 and sell it today you would earn a total of 209.00 from holding JPMorgan Diversified Return or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraShort MSCI vs. JPMorgan Diversified Return
Performance |
| Timeline |
| ProShares UltraShort MSCI |
| JPMorgan Diversified |
ProShares UltraShort and JPMorgan Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and JPMorgan Diversified
The main advantage of trading using opposite ProShares UltraShort and JPMorgan Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, JPMorgan Diversified 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 Diversified will offset losses from the drop in JPMorgan Diversified's long position.| ProShares UltraShort vs. ProShares UltraShort MSCI | ProShares UltraShort vs. ProShares Short MSCI | ProShares UltraShort vs. ProShares UltraShort MSCI | ProShares UltraShort vs. ProShares UltraShort Health |
| JPMorgan Diversified vs. JPMorgan Diversified Return | JPMorgan Diversified vs. JPMorgan Diversified Return | JPMorgan Diversified vs. SPDR SP Global | JPMorgan Diversified vs. Goldman Sachs ActiveBeta |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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