Correlation Between HCM Defender and JPMorgan BetaBuilders
Can any of the company-specific risk be diversified away by investing in both HCM Defender and JPMorgan 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 HCM Defender and JPMorgan BetaBuilders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCM Defender 500 and JPMorgan BetaBuilders International, you can compare the effects of market volatilities on HCM Defender and JPMorgan 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 HCM Defender with a short position of JPMorgan BetaBuilders. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCM Defender and JPMorgan BetaBuilders.
Diversification Opportunities for HCM Defender and JPMorgan BetaBuilders
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HCM and JPMorgan is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding HCM Defender 500 and JPMorgan BetaBuilders Internat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan BetaBuilders and HCM Defender 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 HCM Defender 500 are associated (or correlated) with JPMorgan BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan BetaBuilders has no effect on the direction of HCM Defender i.e., HCM Defender and JPMorgan BetaBuilders go up and down completely randomly.
Pair Corralation between HCM Defender and JPMorgan BetaBuilders
Considering the 90-day investment horizon HCM Defender 500 is expected to under-perform the JPMorgan BetaBuilders. In addition to that, HCM Defender is 1.23 times more volatile than JPMorgan BetaBuilders International. It trades about -0.07 of its total potential returns per unit of risk. JPMorgan BetaBuilders International is currently generating about 0.24 per unit of volatility. If you would invest 5,974 in JPMorgan BetaBuilders International on November 28, 2024 and sell it today you would earn a total of 231.00 from holding JPMorgan BetaBuilders International or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCM Defender 500 vs. JPMorgan BetaBuilders Internat
Performance |
| Timeline |
| HCM Defender 500 |
| JPMorgan BetaBuilders |
HCM Defender and JPMorgan BetaBuilders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCM Defender and JPMorgan BetaBuilders
The main advantage of trading using opposite HCM Defender and JPMorgan BetaBuilders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCM Defender position performs unexpectedly, JPMorgan 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 JPMorgan BetaBuilders will offset losses from the drop in JPMorgan BetaBuilders' long position.| HCM Defender vs. HCM Defender 100 | HCM Defender vs. Overlay Shares Large | HCM Defender vs. VanEck LongFlat Trend | HCM Defender vs. LeaderSharesTM AlphaFactor Core |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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