Correlation Between JP Morgan and Innovator Russell
Can any of the company-specific risk be diversified away by investing in both JP Morgan and Innovator Russell 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 JP Morgan and Innovator Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JP Morgan Exchange Traded and Innovator Russell 2000, you can compare the effects of market volatilities on JP Morgan and Innovator Russell 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 JP Morgan with a short position of Innovator Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of JP Morgan and Innovator Russell.
Diversification Opportunities for JP Morgan and Innovator Russell
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JCTR and Innovator is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Exchange Traded and Innovator Russell 2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Russell 2000 and JP Morgan 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 JP Morgan Exchange Traded are associated (or correlated) with Innovator Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Russell 2000 has no effect on the direction of JP Morgan i.e., JP Morgan and Innovator Russell go up and down completely randomly.
Pair Corralation between JP Morgan and Innovator Russell
Given the investment horizon of 90 days JP Morgan Exchange Traded is expected to generate 1.39 times more return on investment than Innovator Russell. However, JP Morgan is 1.39 times more volatile than Innovator Russell 2000. It trades about 0.12 of its potential returns per unit of risk. Innovator Russell 2000 is currently generating about 0.06 per unit of risk. If you would invest 7,288 in JP Morgan Exchange Traded on October 26, 2024 and sell it today you would earn a total of 1,000.00 from holding JP Morgan Exchange Traded or generate 13.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JP Morgan Exchange Traded vs. Innovator Russell 2000
Performance |
| Timeline |
| JP Morgan Exchange |
| Innovator Russell 2000 |
JP Morgan and Innovator Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JP Morgan and Innovator Russell
The main advantage of trading using opposite JP Morgan and Innovator Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JP Morgan position performs unexpectedly, Innovator Russell 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 Innovator Russell will offset losses from the drop in Innovator Russell's long position.| JP Morgan vs. JPMorgan Diversified Return | JP Morgan vs. Tidal ETF Trust | JP Morgan vs. JPMorgan Value Factor | JP Morgan vs. JPMorgan Momentum Factor |
| Innovator Russell vs. Innovator SP 500 | Innovator Russell vs. Innovator SP 500 | Innovator Russell vs. Innovator SP 500 | Innovator Russell vs. Innovator Equity Power |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |