Correlation Between JPM Research and JPM BetaBuilders
Can any of the company-specific risk be diversified away by investing in both JPM Research and JPM BetaBuilders 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 JPM Research and JPM BetaBuilders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPM Research Enhanced and JPM BetaBuilders Treasury, you can compare the effects of market volatilities on JPM Research and JPM BetaBuilders 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 JPM Research with a short position of JPM BetaBuilders. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPM Research and JPM BetaBuilders.
Diversification Opportunities for JPM Research and JPM BetaBuilders
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPM and JPM is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JPM Research Enhanced and JPM BetaBuilders Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM BetaBuilders Treasury and JPM Research 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 JPM Research Enhanced are associated (or correlated) with JPM BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM BetaBuilders Treasury has no effect on the direction of JPM Research i.e., JPM Research and JPM BetaBuilders go up and down completely randomly.
Pair Corralation between JPM Research and JPM BetaBuilders
Assuming the 90 days trading horizon JPM Research Enhanced is expected to generate 25.86 times more return on investment than JPM BetaBuilders. However, JPM Research is 25.86 times more volatile than JPM BetaBuilders Treasury. It trades about 0.35 of its potential returns per unit of risk. JPM BetaBuilders Treasury is currently generating about 0.47 per unit of risk. If you would invest 251,350 in JPM Research Enhanced on September 2, 2024 and sell it today you would earn a total of 17,875 from holding JPM Research Enhanced or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
JPM Research Enhanced vs. JPM BetaBuilders Treasury
Performance |
| Timeline |
| JPM Research Enhanced |
| JPM BetaBuilders Treasury |
JPM Research and JPM BetaBuilders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPM Research and JPM BetaBuilders
The main advantage of trading using opposite JPM Research and JPM BetaBuilders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPM Research position performs unexpectedly, JPM BetaBuilders 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 JPM BetaBuilders will offset losses from the drop in JPM BetaBuilders' long position.| JPM Research vs. Scottish Mortgage Investment | JPM Research vs. VinaCapital Vietnam Opportunity | JPM Research vs. Edinburgh Worldwide Investment | JPM Research vs. Baillie Gifford Growth |
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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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