Correlation Between JPMorgan Chase and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and ProShares Ultra 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 Chase and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Chase Co and ProShares Ultra Nasdaq, you can compare the effects of market volatilities on JPMorgan Chase and ProShares Ultra 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 Chase with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and ProShares Ultra.
Diversification Opportunities for JPMorgan Chase and ProShares Ultra
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and ProShares is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and ProShares Ultra Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Nasdaq and JPMorgan Chase 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 Chase Co are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Nasdaq has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and ProShares Ultra go up and down completely randomly.
Pair Corralation between JPMorgan Chase and ProShares Ultra
Considering the 90-day investment horizon JPMorgan Chase is expected to generate 1.35 times less return on investment than ProShares Ultra. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.73 times less risky than ProShares Ultra. It trades about 0.11 of its potential returns per unit of risk. ProShares Ultra Nasdaq is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,505 in ProShares Ultra Nasdaq on November 19, 2024 and sell it today you would earn a total of 3,487 from holding ProShares Ultra Nasdaq or generate 139.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
JPMorgan Chase Co vs. ProShares Ultra Nasdaq
Performance |
| Timeline |
| JPMorgan Chase |
| ProShares Ultra Nasdaq |
JPMorgan Chase and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and ProShares Ultra
The main advantage of trading using opposite JPMorgan Chase and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, ProShares Ultra 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 ProShares Ultra will offset losses from the drop in ProShares Ultra's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
| ProShares Ultra vs. ProShares Ultra Cloud | ProShares Ultra vs. Direxion Daily Cloud | ProShares Ultra vs. WisdomTree Cybersecurity |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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