Correlation Between JPMorgan Active and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both JPMorgan Active and SPDR Portfolio 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 SPDR Portfolio 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 SPDR Portfolio MSCI, you can compare the effects of market volatilities on JPMorgan Active and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Active and SPDR Portfolio.
Diversification Opportunities for JPMorgan Active and SPDR Portfolio
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and SPDR is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Active Value and SPDR Portfolio MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio MSCI 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio MSCI has no effect on the direction of JPMorgan Active i.e., JPMorgan Active and SPDR Portfolio go up and down completely randomly.
Pair Corralation between JPMorgan Active and SPDR Portfolio
Given the investment horizon of 90 days JPMorgan Active Value is expected to generate 1.35 times more return on investment than SPDR Portfolio. However, JPMorgan Active is 1.35 times more volatile than SPDR Portfolio MSCI. It trades about 0.37 of its potential returns per unit of risk. SPDR Portfolio MSCI is currently generating about 0.29 per unit of risk. If you would invest 6,403 in JPMorgan Active Value on September 2, 2024 and sell it today you would earn a total of 452.00 from holding JPMorgan Active Value or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Active Value vs. SPDR Portfolio MSCI
Performance |
| Timeline |
| JPMorgan Active Value |
| SPDR Portfolio MSCI |
JPMorgan Active and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Active and SPDR Portfolio
The main advantage of trading using opposite JPMorgan Active and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Active position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.| JPMorgan Active vs. Global X Funds | JPMorgan Active vs. Dell Technologies | JPMorgan Active vs. Juniper Networks |
| SPDR Portfolio vs. WisdomTree Interest Rate | SPDR Portfolio vs. First Trust Developed | SPDR Portfolio vs. VictoryShares International Volatility | SPDR Portfolio vs. Aquagold International |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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