Correlation Between JPMorgan ETFs and Polar Capital
Can any of the company-specific risk be diversified away by investing in both JPMorgan ETFs and Polar Capital 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 Polar Capital 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 Polar Capital Technology, you can compare the effects of market volatilities on JPMorgan ETFs and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan ETFs and Polar Capital.
Diversification Opportunities for JPMorgan ETFs and Polar Capital
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JPMorgan and Polar is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan ETFs ICAV and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of JPMorgan ETFs i.e., JPMorgan ETFs and Polar Capital go up and down completely randomly.
Pair Corralation between JPMorgan ETFs and Polar Capital
Assuming the 90 days trading horizon JPMorgan ETFs is expected to generate 5.07 times less return on investment than Polar Capital. But when comparing it to its historical volatility, JPMorgan ETFs ICAV is 2.55 times less risky than Polar Capital. It trades about 0.08 of its potential returns per unit of risk. Polar Capital Technology is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 31,450 in Polar Capital Technology on August 30, 2024 and sell it today you would earn a total of 1,750 from holding Polar Capital Technology or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
JPMorgan ETFs ICAV vs. Polar Capital Technology
Performance |
| Timeline |
| JPMorgan ETFs ICAV |
| Polar Capital Technology |
JPMorgan ETFs and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan ETFs and Polar Capital
The main advantage of trading using opposite JPMorgan ETFs and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan ETFs position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| JPMorgan ETFs vs. Leverage Shares 3x | JPMorgan ETFs vs. Leverage Shares 3x | JPMorgan ETFs vs. GraniteShares 3x Short | JPMorgan ETFs vs. Leverage Shares 3x |
| Polar Capital vs. Samsung Electronics Co | Polar Capital vs. Samsung Electronics Co | Polar Capital vs. Hyundai Motor | Polar Capital vs. Toyota Motor Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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