Correlation Between Leverage Shares and JPMorgan ETFs
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and JPMorgan ETFs 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 Leverage Shares and JPMorgan ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 2x and JPMorgan ETFs ICAV, you can compare the effects of market volatilities on Leverage Shares and JPMorgan ETFs 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 Leverage Shares with a short position of JPMorgan ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and JPMorgan ETFs.
Diversification Opportunities for Leverage Shares and JPMorgan ETFs
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Leverage and JPMorgan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 2x and JPMorgan ETFs ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan ETFs ICAV and Leverage Shares 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 Leverage Shares 2x are associated (or correlated) with JPMorgan ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan ETFs ICAV has no effect on the direction of Leverage Shares i.e., Leverage Shares and JPMorgan ETFs go up and down completely randomly.
Pair Corralation between Leverage Shares and JPMorgan ETFs
Assuming the 90 days trading horizon Leverage Shares 2x is expected to generate 6.39 times more return on investment than JPMorgan ETFs. However, Leverage Shares is 6.39 times more volatile than JPMorgan ETFs ICAV. It trades about 0.14 of its potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about 0.13 per unit of risk. If you would invest 4,491 in Leverage Shares 2x on August 28, 2024 and sell it today you would earn a total of 1,110 from holding Leverage Shares 2x or generate 24.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 2x vs. JPMorgan ETFs ICAV
Performance |
| Timeline |
| Leverage Shares 2x |
| JPMorgan ETFs ICAV |
Leverage Shares and JPMorgan ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and JPMorgan ETFs
The main advantage of trading using opposite Leverage Shares and JPMorgan ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, JPMorgan ETFs 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 ETFs will offset losses from the drop in JPMorgan ETFs' long position.| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
| JPMorgan ETFs vs. Leverage Shares 3x | JPMorgan ETFs vs. Leverage Shares 3x | JPMorgan ETFs vs. Leverage Shares 3x | JPMorgan ETFs vs. WisdomTree Short GBP |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |