Correlation Between JPMorgan Global and BetaShares Geared
Can any of the company-specific risk be diversified away by investing in both JPMorgan Global and BetaShares Geared 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 Global and BetaShares Geared into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Global Equity and BetaShares Geared Australian, you can compare the effects of market volatilities on JPMorgan Global and BetaShares Geared 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 Global with a short position of BetaShares Geared. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Global and BetaShares Geared.
Diversification Opportunities for JPMorgan Global and BetaShares Geared
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JPMorgan and BetaShares is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Global Equity and BetaShares Geared Australian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Geared and JPMorgan Global 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 Global Equity are associated (or correlated) with BetaShares Geared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Geared has no effect on the direction of JPMorgan Global i.e., JPMorgan Global and BetaShares Geared go up and down completely randomly.
Pair Corralation between JPMorgan Global and BetaShares Geared
Assuming the 90 days trading horizon JPMorgan Global is expected to generate 1.35 times less return on investment than BetaShares Geared. But when comparing it to its historical volatility, JPMorgan Global Equity is 1.59 times less risky than BetaShares Geared. It trades about 0.17 of its potential returns per unit of risk. BetaShares Geared Australian is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,202 in BetaShares Geared Australian on August 30, 2024 and sell it today you would earn a total of 140.00 from holding BetaShares Geared Australian or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
JPMorgan Global Equity vs. BetaShares Geared Australian
Performance |
| Timeline |
| JPMorgan Global Equity |
| BetaShares Geared |
JPMorgan Global and BetaShares Geared Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Global and BetaShares Geared
The main advantage of trading using opposite JPMorgan Global and BetaShares Geared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Global position performs unexpectedly, BetaShares Geared 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 BetaShares Geared will offset losses from the drop in BetaShares Geared's long position.| JPMorgan Global vs. JPMorgan Equity Premium | JPMorgan Global vs. JPMorgan Global Research | JPMorgan Global vs. JPMorgan 100Q Equity | JPMorgan Global vs. JPMorgan 100Q Equity |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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