Correlation Between Nasdaq-100(r) and Jpmorgan Small
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) 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(r) 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 2x Strategy and Jpmorgan Small Cap, you can compare the effects of market volatilities on Nasdaq-100(r) 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(r) with a short position of Jpmorgan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Jpmorgan Small.
Diversification Opportunities for Nasdaq-100(r) and Jpmorgan Small
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq-100(r) and Jpmorgan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Jpmorgan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Small Cap and Nasdaq-100(r) 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 2x Strategy 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 Cap has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Jpmorgan Small go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Jpmorgan Small
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to under-perform the Jpmorgan Small. In addition to that, Nasdaq-100(r) is 2.39 times more volatile than Jpmorgan Small Cap. It trades about -0.1 of its total potential returns per unit of risk. Jpmorgan Small Cap is currently generating about -0.14 per unit of volatility. If you would invest 2,341 in Jpmorgan Small Cap on October 9, 2024 and sell it today you would lose (87.00) from holding Jpmorgan Small Cap or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Jpmorgan Small Cap
Performance |
| Timeline |
| Nasdaq 100 2x |
| Jpmorgan Small Cap |
Nasdaq-100(r) and Jpmorgan Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Jpmorgan Small
The main advantage of trading using opposite Nasdaq-100(r) and Jpmorgan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) 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(r) vs. Versatile Bond Portfolio | Nasdaq-100(r) vs. L Abbett Fundamental | Nasdaq-100(r) vs. T Rowe Price | Nasdaq-100(r) vs. Arrow Managed Futures |
| Jpmorgan Small vs. Virtus Seix Government | Jpmorgan Small vs. Short Term Government Fund | Jpmorgan Small vs. Dws Government Money | Jpmorgan Small vs. Intermediate Government Bond |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |