Correlation Between JPMorgan Active and Xtrackers California
Can any of the company-specific risk be diversified away by investing in both JPMorgan Active and Xtrackers California 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 JPMorgan Active and Xtrackers California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Active Value and Xtrackers California Municipal, you can compare the effects of market volatilities on JPMorgan Active and Xtrackers California 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 JPMorgan Active with a short position of Xtrackers California. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Active and Xtrackers California.
Diversification Opportunities for JPMorgan Active and Xtrackers California
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMorgan and Xtrackers is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Active Value and Xtrackers California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers California and JPMorgan Active 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 JPMorgan Active Value are associated (or correlated) with Xtrackers California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers California has no effect on the direction of JPMorgan Active i.e., JPMorgan Active and Xtrackers California go up and down completely randomly.
Pair Corralation between JPMorgan Active and Xtrackers California
Given the investment horizon of 90 days JPMorgan Active Value is expected to generate 2.24 times more return on investment than Xtrackers California. However, JPMorgan Active is 2.24 times more volatile than Xtrackers California Municipal. It trades about 0.33 of its potential returns per unit of risk. Xtrackers California Municipal is currently generating about -0.1 per unit of risk. If you would invest 6,391 in JPMorgan Active Value on November 4, 2024 and sell it today you would earn a total of 267.00 from holding JPMorgan Active Value or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
JPMorgan Active Value vs. Xtrackers California Municipal
Performance |
| Timeline |
| JPMorgan Active Value |
| Xtrackers California |
JPMorgan Active and Xtrackers California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Active and Xtrackers California
The main advantage of trading using opposite JPMorgan Active and Xtrackers California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Active position performs unexpectedly, Xtrackers California 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 Xtrackers California will offset losses from the drop in Xtrackers California's long position.| JPMorgan Active vs. Global X Funds | JPMorgan Active vs. Dell Technologies | JPMorgan Active vs. Juniper Networks |
| Xtrackers California vs. VanEck Vectors Moodys | Xtrackers California vs. Valued Advisers Trust | Xtrackers California vs. Principal Exchange Traded Funds | Xtrackers California vs. Vanguard ESG Corporate |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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