Correlation Between JP Morgan and Global X
Can any of the company-specific risk be diversified away by investing in both JP Morgan and Global X 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 Global X 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 Global X SP, you can compare the effects of market volatilities on JP Morgan and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of JP Morgan and Global X.
Diversification Opportunities for JP Morgan and Global X
Almost no diversification
The 3 months correlation between JIRE and Global is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Exchange Traded and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SP has no effect on the direction of JP Morgan i.e., JP Morgan and Global X go up and down completely randomly.
Pair Corralation between JP Morgan and Global X
Given the investment horizon of 90 days JP Morgan Exchange Traded is expected to under-perform the Global X. In addition to that, JP Morgan is 1.04 times more volatile than Global X SP. It trades about -0.17 of its total potential returns per unit of risk. Global X SP is currently generating about -0.13 per unit of volatility. If you would invest 3,144 in Global X SP on August 30, 2024 and sell it today you would lose (80.00) from holding Global X SP or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JP Morgan Exchange Traded vs. Global X SP
Performance |
| Timeline |
| JP Morgan Exchange |
| Global X SP |
JP Morgan and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JP Morgan and Global X
The main advantage of trading using opposite JP Morgan and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JP Morgan position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| JP Morgan vs. JPMorgan Realty Income | JP Morgan vs. JPMorgan Market Expansion | JP Morgan vs. JPMorgan Emerging Markets | JP Morgan vs. JPMorgan BetaBuilders 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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