Correlation Between Innovator Growth and JPMorgan Climate
Can any of the company-specific risk be diversified away by investing in both Innovator Growth and JPMorgan Climate 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 Innovator Growth and JPMorgan Climate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator Growth 100 Accelerated and JPMorgan Climate Change, you can compare the effects of market volatilities on Innovator Growth and JPMorgan Climate 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 Innovator Growth with a short position of JPMorgan Climate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Growth and JPMorgan Climate.
Diversification Opportunities for Innovator Growth and JPMorgan Climate
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Innovator and JPMorgan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Growth 100 Accelerat and JPMorgan Climate Change in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Climate Change and Innovator Growth 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 Innovator Growth 100 Accelerated are associated (or correlated) with JPMorgan Climate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Climate Change has no effect on the direction of Innovator Growth i.e., Innovator Growth and JPMorgan Climate go up and down completely randomly.
Pair Corralation between Innovator Growth and JPMorgan Climate
Given the investment horizon of 90 days Innovator Growth 100 Accelerated is expected to generate 0.42 times more return on investment than JPMorgan Climate. However, Innovator Growth 100 Accelerated is 2.37 times less risky than JPMorgan Climate. It trades about 0.18 of its potential returns per unit of risk. JPMorgan Climate Change is currently generating about 0.02 per unit of risk. If you would invest 3,767 in Innovator Growth 100 Accelerated on November 9, 2024 and sell it today you would earn a total of 68.00 from holding Innovator Growth 100 Accelerated or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator Growth 100 Accelerat vs. JPMorgan Climate Change
Performance |
| Timeline |
| Innovator Growth 100 |
| JPMorgan Climate Change |
Innovator Growth and JPMorgan Climate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator Growth and JPMorgan Climate
The main advantage of trading using opposite Innovator Growth and JPMorgan Climate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator Growth position performs unexpectedly, JPMorgan Climate 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 Climate will offset losses from the drop in JPMorgan Climate's long position.The idea behind Innovator Growth 100 Accelerated and JPMorgan Climate Change pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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