Correlation Between WisdomTree NASDAQ and JPMorgan ETFs
Can any of the company-specific risk be diversified away by investing in both WisdomTree NASDAQ 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 WisdomTree NASDAQ and JPMorgan ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree NASDAQ 100 and JPMorgan ETFs ICAV, you can compare the effects of market volatilities on WisdomTree NASDAQ 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 WisdomTree NASDAQ with a short position of JPMorgan ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree NASDAQ and JPMorgan ETFs.
Diversification Opportunities for WisdomTree NASDAQ and JPMorgan ETFs
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and JPMorgan is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree NASDAQ 100 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 WisdomTree NASDAQ 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 WisdomTree NASDAQ 100 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 WisdomTree NASDAQ i.e., WisdomTree NASDAQ and JPMorgan ETFs go up and down completely randomly.
Pair Corralation between WisdomTree NASDAQ and JPMorgan ETFs
Assuming the 90 days trading horizon WisdomTree NASDAQ 100 is expected to under-perform the JPMorgan ETFs. In addition to that, WisdomTree NASDAQ is 3.31 times more volatile than JPMorgan ETFs ICAV. It trades about -0.06 of its total potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about -0.07 per unit of volatility. If you would invest 5,678 in JPMorgan ETFs ICAV on January 26, 2025 and sell it today you would lose (243.00) from holding JPMorgan ETFs ICAV or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree NASDAQ 100 vs. JPMorgan ETFs ICAV
Performance |
| Timeline |
| WisdomTree NASDAQ 100 |
| JPMorgan ETFs ICAV |
WisdomTree NASDAQ and JPMorgan ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree NASDAQ and JPMorgan ETFs
The main advantage of trading using opposite WisdomTree NASDAQ and JPMorgan ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree NASDAQ 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.| WisdomTree NASDAQ vs. WisdomTree Zinc | WisdomTree NASDAQ vs. WisdomTree Brent Crude | WisdomTree NASDAQ vs. WisdomTree Aluminium 2x | WisdomTree NASDAQ vs. WisdomTree Enhanced Commodity |
| JPMorgan ETFs vs. Vanguard FTSE Developed | JPMorgan ETFs vs. Leverage Shares 2x | JPMorgan ETFs vs. Amundi Index Solutions | JPMorgan ETFs vs. Amundi Index Solutions |
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 Stocks Directory module to find actively traded stocks across global markets.
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