Correlation Between JPMorgan ETFs and Dow Jones
Can any of the company-specific risk be diversified away by investing in both JPMorgan ETFs and Dow Jones 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 ETFs and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan ETFs ICAV and Dow Jones Industrial, you can compare the effects of market volatilities on JPMorgan ETFs and Dow Jones 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 ETFs with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan ETFs and Dow Jones.
Diversification Opportunities for JPMorgan ETFs and Dow Jones
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and Dow is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan ETFs ICAV and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and JPMorgan ETFs 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 ETFs ICAV are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of JPMorgan ETFs i.e., JPMorgan ETFs and Dow Jones go up and down completely randomly.
Pair Corralation between JPMorgan ETFs and Dow Jones
Assuming the 90 days trading horizon JPMorgan ETFs is expected to generate 2.17 times less return on investment than Dow Jones. But when comparing it to its historical volatility, JPMorgan ETFs ICAV is 1.96 times less risky than Dow Jones. It trades about 0.18 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 4,093,693 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 397,372 from holding Dow Jones Industrial or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.46% |
| Values | Daily Returns |
JPMorgan ETFs ICAV vs. Dow Jones Industrial
Performance |
| Timeline |
JPMorgan ETFs and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
JPMorgan ETFs ICAV
Pair trading matchups for JPMorgan ETFs
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with JPMorgan ETFs and Dow Jones
The main advantage of trading using opposite JPMorgan ETFs and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan ETFs position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| JPMorgan ETFs vs. UBS Fund Solutions | JPMorgan ETFs vs. Vanguard Funds Public | JPMorgan ETFs vs. iShares Core SP | JPMorgan ETFs vs. iShares Core MSCI |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |