Correlation Between GraniteShares FAANG and JPMorgan ETFs
Can any of the company-specific risk be diversified away by investing in both GraniteShares FAANG 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 GraniteShares FAANG and JPMorgan ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares FAANG ETC and JPMorgan ETFs ICAV, you can compare the effects of market volatilities on GraniteShares FAANG 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 GraniteShares FAANG with a short position of JPMorgan ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares FAANG and JPMorgan ETFs.
Diversification Opportunities for GraniteShares FAANG and JPMorgan ETFs
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GraniteShares and JPMorgan is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares FAANG ETC 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 GraniteShares FAANG 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 GraniteShares FAANG ETC 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 GraniteShares FAANG i.e., GraniteShares FAANG and JPMorgan ETFs go up and down completely randomly.
Pair Corralation between GraniteShares FAANG and JPMorgan ETFs
Assuming the 90 days trading horizon GraniteShares FAANG ETC is expected to generate 2.43 times more return on investment than JPMorgan ETFs. However, GraniteShares FAANG is 2.43 times more volatile than JPMorgan ETFs ICAV. It trades about 0.27 of its potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about 0.05 per unit of risk. If you would invest 4,386 in GraniteShares FAANG ETC on August 24, 2024 and sell it today you would earn a total of 300.00 from holding GraniteShares FAANG ETC or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
GraniteShares FAANG ETC vs. JPMorgan ETFs ICAV
Performance |
| Timeline |
| GraniteShares FAANG ETC |
| JPMorgan ETFs ICAV |
GraniteShares FAANG and JPMorgan ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares FAANG and JPMorgan ETFs
The main advantage of trading using opposite GraniteShares FAANG and JPMorgan ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares FAANG 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.| GraniteShares FAANG vs. Leverage Shares 3x | GraniteShares FAANG vs. WisdomTree SP 500 | GraniteShares FAANG vs. WisdomTree Silver 3x | GraniteShares FAANG vs. Lyxor 10Y Inflation |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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