Correlation Between BetaShares Global and JPMorgan Equity
Can any of the company-specific risk be diversified away by investing in both BetaShares Global 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 BetaShares Global and JPMorgan Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaShares Global Government and JPMorgan Equity Premium, you can compare the effects of market volatilities on BetaShares Global 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 BetaShares Global with a short position of JPMorgan Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaShares Global and JPMorgan Equity.
Diversification Opportunities for BetaShares Global and JPMorgan Equity
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaShares and JPMorgan is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Global Government 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 BetaShares Global 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 BetaShares Global Government 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 BetaShares Global i.e., BetaShares Global and JPMorgan Equity go up and down completely randomly.
Pair Corralation between BetaShares Global and JPMorgan Equity
Assuming the 90 days trading horizon BetaShares Global is expected to generate 1.56 times less return on investment than JPMorgan Equity. In addition to that, BetaShares Global is 1.76 times more volatile than JPMorgan Equity Premium. It trades about 0.04 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 5,064 in JPMorgan Equity Premium on September 1, 2024 and sell it today you would earn a total of 335.00 from holding JPMorgan Equity Premium or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
BetaShares Global Government vs. JPMorgan Equity Premium
Performance |
| Timeline |
| BetaShares Global |
| JPMorgan Equity Premium |
BetaShares Global and JPMorgan Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaShares Global and JPMorgan Equity
The main advantage of trading using opposite BetaShares Global and JPMorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaShares Global 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.| BetaShares Global vs. Champion Iron | BetaShares Global vs. Australian Dairy Farms | BetaShares Global vs. Perpetual Credit Income | BetaShares Global vs. Greentech Metals |
| JPMorgan Equity vs. Champion Iron | JPMorgan Equity vs. Australian Dairy Farms | JPMorgan Equity vs. Perpetual Credit Income | JPMorgan Equity vs. Greentech Metals |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |