Correlation Between JPMorgan ETFs and Leverage Shares
Can any of the company-specific risk be diversified away by investing in both JPMorgan ETFs and Leverage Shares 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 Leverage Shares 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 Leverage Shares 3x, you can compare the effects of market volatilities on JPMorgan ETFs and Leverage Shares 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 Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan ETFs and Leverage Shares.
Diversification Opportunities for JPMorgan ETFs and Leverage Shares
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and Leverage is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan ETFs ICAV and Leverage Shares 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 3x 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 Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 3x has no effect on the direction of JPMorgan ETFs i.e., JPMorgan ETFs and Leverage Shares go up and down completely randomly.
Pair Corralation between JPMorgan ETFs and Leverage Shares
Assuming the 90 days trading horizon JPMorgan ETFs is expected to generate 11.53 times less return on investment than Leverage Shares. But when comparing it to its historical volatility, JPMorgan ETFs ICAV is 9.12 times less risky than Leverage Shares. It trades about 0.14 of its potential returns per unit of risk. Leverage Shares 3x is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,659 in Leverage Shares 3x on August 28, 2024 and sell it today you would earn a total of 1,558 from holding Leverage Shares 3x or generate 93.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan ETFs ICAV vs. Leverage Shares 3x
Performance |
| Timeline |
| JPMorgan ETFs ICAV |
| Leverage Shares 3x |
JPMorgan ETFs and Leverage Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan ETFs and Leverage Shares
The main advantage of trading using opposite JPMorgan ETFs and Leverage Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan ETFs position performs unexpectedly, Leverage Shares 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 Leverage Shares will offset losses from the drop in Leverage Shares' long position.| JPMorgan ETFs vs. Leverage Shares 3x | JPMorgan ETFs vs. Leverage Shares 3x | JPMorgan ETFs vs. Leverage Shares 3x | JPMorgan ETFs vs. WisdomTree Short GBP |
| Leverage Shares vs. WisdomTree SP 500 | Leverage Shares vs. WisdomTree Silver 3x | Leverage Shares vs. Lyxor 10Y Inflation | Leverage Shares vs. GraniteShares 3x Short |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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