Correlation Between Roundhill Investments and JPMorgan Equity
Can any of the company-specific risk be diversified away by investing in both Roundhill Investments and JPMorgan Equity 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 Roundhill Investments and JPMorgan Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roundhill Investments and JPMorgan Equity Premium, you can compare the effects of market volatilities on Roundhill Investments and JPMorgan Equity 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 Roundhill Investments with a short position of JPMorgan Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roundhill Investments and JPMorgan Equity.
Diversification Opportunities for Roundhill Investments and JPMorgan Equity
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Roundhill and JPMorgan is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill Investments and JPMorgan Equity Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Equity Premium and Roundhill Investments 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 Roundhill Investments are associated (or correlated) with JPMorgan Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Equity Premium has no effect on the direction of Roundhill Investments i.e., Roundhill Investments and JPMorgan Equity go up and down completely randomly.
Pair Corralation between Roundhill Investments and JPMorgan Equity
If you would invest 5,396 in JPMorgan Equity Premium on August 27, 2024 and sell it today you would earn a total of 620.00 from holding JPMorgan Equity Premium or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.53% |
| Values | Daily Returns |
Roundhill Investments vs. JPMorgan Equity Premium
Performance |
| Timeline |
| Roundhill Investments |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| JPMorgan Equity Premium |
Roundhill Investments and JPMorgan Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roundhill Investments and JPMorgan Equity
The main advantage of trading using opposite Roundhill Investments and JPMorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roundhill Investments position performs unexpectedly, JPMorgan Equity 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 Equity will offset losses from the drop in JPMorgan Equity's long position.| Roundhill Investments vs. SoFi Social 50 | Roundhill Investments vs. Global X Blockchain | Roundhill Investments vs. Tuttle Capital Short |
| JPMorgan Equity vs. JPMorgan Nasdaq Equity | JPMorgan Equity vs. Global X NASDAQ | JPMorgan Equity vs. Schwab Dividend Equity | JPMorgan Equity vs. Global X Russell |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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