Correlation Between JPM BetaBuilders and JPM Global
Can any of the company-specific risk be diversified away by investing in both JPM BetaBuilders and JPM Global 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 JPM BetaBuilders and JPM Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPM BetaBuilders China and JPM Global Research, you can compare the effects of market volatilities on JPM BetaBuilders and JPM Global 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 JPM BetaBuilders with a short position of JPM Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPM BetaBuilders and JPM Global.
Diversification Opportunities for JPM BetaBuilders and JPM Global
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JPM and JPM is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding JPM BetaBuilders China and JPM Global Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM Global Research and JPM BetaBuilders 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 JPM BetaBuilders China are associated (or correlated) with JPM Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM Global Research has no effect on the direction of JPM BetaBuilders i.e., JPM BetaBuilders and JPM Global go up and down completely randomly.
Pair Corralation between JPM BetaBuilders and JPM Global
Assuming the 90 days trading horizon JPM BetaBuilders China is expected to generate 0.51 times more return on investment than JPM Global. However, JPM BetaBuilders China is 1.97 times less risky than JPM Global. It trades about -0.11 of its potential returns per unit of risk. JPM Global Research is currently generating about -0.09 per unit of risk. If you would invest 9,386 in JPM BetaBuilders China on November 28, 2024 and sell it today you would lose (84.00) from holding JPM BetaBuilders China or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPM BetaBuilders China vs. JPM Global Research
Performance |
| Timeline |
| JPM BetaBuilders China |
| JPM Global Research |
JPM BetaBuilders and JPM Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPM BetaBuilders and JPM Global
The main advantage of trading using opposite JPM BetaBuilders and JPM Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPM BetaBuilders position performs unexpectedly, JPM Global 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 JPM Global will offset losses from the drop in JPM Global's long position.| JPM BetaBuilders vs. JPM AC Asia | JPM BetaBuilders vs. JPM BetaBuilders Treasury | JPM BetaBuilders vs. JPM Research Enhanced | JPM BetaBuilders vs. JPM Global Research |
| JPM Global vs. JPM BetaBuilders China | JPM Global vs. JPM AC Asia | JPM Global vs. JPM BetaBuilders Treasury | JPM Global vs. JPM Research Enhanced |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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