Correlation Between JPMorgan Fundamental and Tradr 2X
Can any of the company-specific risk be diversified away by investing in both JPMorgan Fundamental and Tradr 2X 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 Tradr 2X 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 Tradr 2X Long, you can compare the effects of market volatilities on JPMorgan Fundamental and Tradr 2X 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 Tradr 2X. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Fundamental and Tradr 2X.
Diversification Opportunities for JPMorgan Fundamental and Tradr 2X
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and Tradr is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Fundamental Data and Tradr 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradr 2X Long 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 Tradr 2X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradr 2X Long has no effect on the direction of JPMorgan Fundamental i.e., JPMorgan Fundamental and Tradr 2X go up and down completely randomly.
Pair Corralation between JPMorgan Fundamental and Tradr 2X
Given the investment horizon of 90 days JPMorgan Fundamental is expected to generate 1.39 times less return on investment than Tradr 2X. But when comparing it to its historical volatility, JPMorgan Fundamental Data is 1.55 times less risky than Tradr 2X. It trades about 0.4 of its potential returns per unit of risk. Tradr 2X Long is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 2,533 in Tradr 2X Long on September 4, 2024 and sell it today you would earn a total of 283.00 from holding Tradr 2X Long or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Fundamental Data vs. Tradr 2X Long
Performance |
| Timeline |
| JPMorgan Fundamental Data |
| Tradr 2X Long |
JPMorgan Fundamental and Tradr 2X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Fundamental and Tradr 2X
The main advantage of trading using opposite JPMorgan Fundamental and Tradr 2X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Fundamental position performs unexpectedly, Tradr 2X 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 Tradr 2X will offset losses from the drop in Tradr 2X'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 |
| Tradr 2X vs. FT Vest Equity | Tradr 2X vs. Northern Lights | Tradr 2X vs. Dimensional International High | Tradr 2X 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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