Correlation Between JPMorgan Fundamental and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both JPMorgan Fundamental and SPDR Portfolio 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 Fundamental and SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Fundamental Data and SPDR Portfolio SP, you can compare the effects of market volatilities on JPMorgan Fundamental and SPDR Portfolio 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 Fundamental with a short position of SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Fundamental and SPDR Portfolio.
Diversification Opportunities for JPMorgan Fundamental and SPDR Portfolio
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPMorgan and SPDR is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Fundamental Data and SPDR Portfolio SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio SP and JPMorgan Fundamental 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 Fundamental Data are associated (or correlated) with SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio SP has no effect on the direction of JPMorgan Fundamental i.e., JPMorgan Fundamental and SPDR Portfolio go up and down completely randomly.
Pair Corralation between JPMorgan Fundamental and SPDR Portfolio
Given the investment horizon of 90 days JPMorgan Fundamental Data is expected to generate 0.69 times more return on investment than SPDR Portfolio. However, JPMorgan Fundamental Data is 1.44 times less risky than SPDR Portfolio. It trades about 0.24 of its potential returns per unit of risk. SPDR Portfolio SP is currently generating about 0.14 per unit of risk. If you would invest 4,992 in JPMorgan Fundamental Data on September 14, 2024 and sell it today you would earn a total of 849.68 from holding JPMorgan Fundamental Data or generate 17.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 33.83% |
| Values | Daily Returns |
JPMorgan Fundamental Data vs. SPDR Portfolio SP
Performance |
| Timeline |
| JPMorgan Fundamental Data |
| SPDR Portfolio SP |
JPMorgan Fundamental and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Fundamental and SPDR Portfolio
The main advantage of trading using opposite JPMorgan Fundamental and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Fundamental position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.| JPMorgan Fundamental vs. FT Vest Equity | JPMorgan Fundamental vs. Northern Lights | JPMorgan Fundamental vs. Dimensional International High | JPMorgan Fundamental vs. Matthews China Discovery |
| SPDR Portfolio vs. FT Vest Equity | SPDR Portfolio vs. Northern Lights | SPDR Portfolio vs. Dimensional International High | SPDR Portfolio vs. JPMorgan Fundamental Data |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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