Correlation Between NYSE Composite and JPMorgan ETFs
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and JPMorgan ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and JPMorgan ETFs ICAV, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of JPMorgan ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and JPMorgan ETFs.
Diversification Opportunities for NYSE Composite and JPMorgan ETFs
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and JPMorgan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and JPMorgan ETFs go up and down completely randomly.
Pair Corralation between NYSE Composite and JPMorgan ETFs
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.54 times more return on investment than JPMorgan ETFs. However, NYSE Composite is 3.54 times more volatile than JPMorgan ETFs ICAV. It trades about 0.11 of its potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about 0.12 per unit of risk. If you would invest 1,550,264 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 476,940 from holding NYSE Composite or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.93% |
| Values | Daily Returns |
NYSE Composite vs. JPMorgan ETFs ICAV
Performance |
| Timeline |
NYSE Composite and JPMorgan ETFs Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
JPMorgan ETFs ICAV
Pair trading matchups for JPMorgan ETFs
Pair Trading with NYSE Composite and JPMorgan ETFs
The main advantage of trading using opposite NYSE Composite and JPMorgan ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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