Correlation Between Nasdaq 100 and Jpmorgan Small
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Jpmorgan Small 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 Nasdaq 100 and Jpmorgan Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Fund Class and Jpmorgan Small Pany, you can compare the effects of market volatilities on Nasdaq 100 and Jpmorgan Small 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 Nasdaq 100 with a short position of Jpmorgan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Jpmorgan Small.
Diversification Opportunities for Nasdaq 100 and Jpmorgan Small
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq and Jpmorgan is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Fund Class and Jpmorgan Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Small Pany and Nasdaq 100 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 Nasdaq 100 Fund Class are associated (or correlated) with Jpmorgan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Small Pany has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Jpmorgan Small go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Jpmorgan Small
Assuming the 90 days horizon Nasdaq 100 is expected to generate 2.29 times less return on investment than Jpmorgan Small. But when comparing it to its historical volatility, Nasdaq 100 Fund Class is 1.69 times less risky than Jpmorgan Small. It trades about 0.19 of its potential returns per unit of risk. Jpmorgan Small Pany is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,934 in Jpmorgan Small Pany on September 4, 2024 and sell it today you would earn a total of 184.00 from holding Jpmorgan Small Pany or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Nasdaq 100 Fund Class vs. Jpmorgan Small Pany
Performance |
| Timeline |
| Nasdaq 100 Fund |
| Jpmorgan Small Pany |
Nasdaq 100 and Jpmorgan Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Jpmorgan Small
The main advantage of trading using opposite Nasdaq 100 and Jpmorgan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Jpmorgan Small 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 Small will offset losses from the drop in Jpmorgan Small's long position.| Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 2x Strategy | Nasdaq 100 vs. Dow 2x Strategy |
| Jpmorgan Small vs. Advent Claymore Convertible | Jpmorgan Small vs. Rationalpier 88 Convertible | Jpmorgan Small vs. Lord Abbett Convertible | Jpmorgan Small vs. Calamos Dynamic Convertible |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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