Correlation Between JPMorgan Active and FT Cboe
Can any of the company-specific risk be diversified away by investing in both JPMorgan Active and FT Cboe 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 FT Cboe 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 FT Cboe Vest, you can compare the effects of market volatilities on JPMorgan Active and FT Cboe 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 FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Active and FT Cboe.
Diversification Opportunities for JPMorgan Active and FT Cboe
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JPMorgan and IGLD is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Active Value and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest 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 FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of JPMorgan Active i.e., JPMorgan Active and FT Cboe go up and down completely randomly.
Pair Corralation between JPMorgan Active and FT Cboe
Given the investment horizon of 90 days JPMorgan Active is expected to generate 1.16 times less return on investment than FT Cboe. In addition to that, JPMorgan Active is 1.09 times more volatile than FT Cboe Vest. It trades about 0.07 of its total potential returns per unit of risk. FT Cboe Vest is currently generating about 0.09 per unit of volatility. If you would invest 1,469 in FT Cboe Vest on October 25, 2024 and sell it today you would earn a total of 469.00 from holding FT Cboe Vest or generate 31.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Active Value vs. FT Cboe Vest
Performance |
| Timeline |
| JPMorgan Active Value |
| FT Cboe Vest |
JPMorgan Active and FT Cboe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Active and FT Cboe
The main advantage of trading using opposite JPMorgan Active and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Active position performs unexpectedly, FT Cboe 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 FT Cboe will offset losses from the drop in FT Cboe's long position.| JPMorgan Active vs. Global X Funds | JPMorgan Active vs. Dell Technologies | JPMorgan Active vs. Juniper Networks |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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