Correlation Between Global X and JP Morgan
Can any of the company-specific risk be diversified away by investing in both Global X and JP Morgan 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 Global X and JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and JP Morgan Exchange, you can compare the effects of market volatilities on Global X and JP Morgan 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 Global X with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and JP Morgan.
Diversification Opportunities for Global X and JP Morgan
Good diversification
The 3 months correlation between Global and BBLB is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and JP Morgan Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Exchange and Global X 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 Global X Funds are associated (or correlated) with JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Exchange has no effect on the direction of Global X i.e., Global X and JP Morgan go up and down completely randomly.
Pair Corralation between Global X and JP Morgan
Given the investment horizon of 90 days Global X is expected to generate 9.6 times less return on investment than JP Morgan. But when comparing it to its historical volatility, Global X Funds is 3.59 times less risky than JP Morgan. It trades about 0.01 of its potential returns per unit of risk. JP Morgan Exchange is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,680 in JP Morgan Exchange on August 29, 2024 and sell it today you would earn a total of 70.00 from holding JP Morgan Exchange or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global X Funds vs. JP Morgan Exchange
Performance |
| Timeline |
| Global X Funds |
| JP Morgan Exchange |
Global X and JP Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and JP Morgan
The main advantage of trading using opposite Global X and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, JP Morgan 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 JP Morgan will offset losses from the drop in JP Morgan's long position.| Global X vs. Vanguard Total Stock | Global X vs. SPDR SP 500 | Global X vs. iShares Core SP | Global X vs. Vanguard Total Bond |
| JP Morgan vs. Global X Funds | JP Morgan vs. US Treasury 12 | JP Morgan vs. Tidal Trust II | JP Morgan vs. Franklin Liberty Treasury |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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