Correlation Between REX FANG and JPMorgan Equity
Can any of the company-specific risk be diversified away by investing in both REX FANG and JPMorgan Equity 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 REX FANG and JPMorgan Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REX FANG Innovation and JPMorgan Equity Premium, you can compare the effects of market volatilities on REX FANG and JPMorgan Equity 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 REX FANG with a short position of JPMorgan Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of REX FANG and JPMorgan Equity.
Diversification Opportunities for REX FANG and JPMorgan Equity
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between REX and JPMorgan is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding REX FANG Innovation and JPMorgan Equity Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Equity Premium and REX FANG 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 REX FANG Innovation are associated (or correlated) with JPMorgan Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Equity Premium has no effect on the direction of REX FANG i.e., REX FANG and JPMorgan Equity go up and down completely randomly.
Pair Corralation between REX FANG and JPMorgan Equity
Given the investment horizon of 90 days REX FANG Innovation is expected to under-perform the JPMorgan Equity. In addition to that, REX FANG is 1.85 times more volatile than JPMorgan Equity Premium. It trades about -0.05 of its total potential returns per unit of risk. JPMorgan Equity Premium is currently generating about 0.11 per unit of volatility. If you would invest 5,780 in JPMorgan Equity Premium on October 21, 2024 and sell it today you would earn a total of 70.00 from holding JPMorgan Equity Premium or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REX FANG Innovation vs. JPMorgan Equity Premium
Performance |
| Timeline |
| REX FANG Innovation |
| JPMorgan Equity Premium |
REX FANG and JPMorgan Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REX FANG and JPMorgan Equity
The main advantage of trading using opposite REX FANG and JPMorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REX FANG position performs unexpectedly, JPMorgan Equity 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 Equity will offset losses from the drop in JPMorgan Equity's long position.| REX FANG vs. JPMorgan Equity Premium | REX FANG vs. Global X SP | REX FANG vs. Amplify CWP Enhanced | REX FANG vs. Global X Russell |
| JPMorgan Equity vs. JPMorgan Nasdaq Equity | JPMorgan Equity vs. Global X NASDAQ | JPMorgan Equity vs. Schwab Dividend Equity | JPMorgan Equity vs. Global X Russell |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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