Correlation Between ProShares and JPMorgan Nasdaq
Can any of the company-specific risk be diversified away by investing in both ProShares and JPMorgan Nasdaq 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 ProShares and JPMorgan Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares SP MidCap and JPMorgan Nasdaq Equity, you can compare the effects of market volatilities on ProShares and JPMorgan Nasdaq 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 ProShares with a short position of JPMorgan Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and JPMorgan Nasdaq.
Diversification Opportunities for ProShares and JPMorgan Nasdaq
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and JPMorgan is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP MidCap and JPMorgan Nasdaq Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Nasdaq Equity and ProShares 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 ProShares SP MidCap are associated (or correlated) with JPMorgan Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Nasdaq Equity has no effect on the direction of ProShares i.e., ProShares and JPMorgan Nasdaq go up and down completely randomly.
Pair Corralation between ProShares and JPMorgan Nasdaq
Given the investment horizon of 90 days ProShares is expected to generate 1.49 times less return on investment than JPMorgan Nasdaq. But when comparing it to its historical volatility, ProShares SP MidCap is 1.01 times less risky than JPMorgan Nasdaq. It trades about 0.04 of its potential returns per unit of risk. JPMorgan Nasdaq Equity is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,703 in JPMorgan Nasdaq Equity on January 22, 2025 and sell it today you would earn a total of 1,066 from holding JPMorgan Nasdaq Equity or generate 28.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares SP MidCap vs. JPMorgan Nasdaq Equity
Performance |
| Timeline |
| ProShares SP MidCap |
| JPMorgan Nasdaq Equity |
ProShares and JPMorgan Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and JPMorgan Nasdaq
The main advantage of trading using opposite ProShares and JPMorgan Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, JPMorgan Nasdaq 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 Nasdaq will offset losses from the drop in JPMorgan Nasdaq's long position.| ProShares vs. ProShares Russell 2000 | ProShares vs. ProShares MSCI EAFE | ProShares vs. ProShares MSCI Emerging | ProShares vs. ProShares MSCI Europe |
| JPMorgan Nasdaq vs. JPMorgan Equity Premium | JPMorgan Nasdaq vs. Global X SP | JPMorgan Nasdaq vs. Amplify CWP Enhanced | JPMorgan Nasdaq vs. Global X Russell |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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