Correlation Between Nasdaq 100 and Jpmorgan Equity
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Jpmorgan Equity 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 Equity 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 Equity Fund, you can compare the effects of market volatilities on Nasdaq 100 and Jpmorgan Equity 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 Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Jpmorgan Equity.
Diversification Opportunities for Nasdaq 100 and Jpmorgan Equity
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq and Jpmorgan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Jpmorgan Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Equity 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 2x Strategy are associated (or correlated) with Jpmorgan Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Equity has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Jpmorgan Equity go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Jpmorgan Equity
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to under-perform the Jpmorgan Equity. In addition to that, Nasdaq 100 is 5.05 times more volatile than Jpmorgan Equity Fund. It trades about -0.03 of its total potential returns per unit of risk. Jpmorgan Equity Fund is currently generating about 0.07 per unit of volatility. If you would invest 2,734 in Jpmorgan Equity Fund on September 14, 2024 and sell it today you would earn a total of 20.00 from holding Jpmorgan Equity Fund or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Jpmorgan Equity Fund
Performance |
| Timeline |
| Nasdaq 100 2x |
| Jpmorgan Equity |
Nasdaq 100 and Jpmorgan Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Jpmorgan Equity
The main advantage of trading using opposite Nasdaq 100 and Jpmorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Jpmorgan Equity 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 Equity will offset losses from the drop in Jpmorgan Equity's long position.| Nasdaq 100 vs. Basic Materials Fund | Nasdaq 100 vs. Basic Materials Fund | Nasdaq 100 vs. Banking Fund Class | Nasdaq 100 vs. Basic Materials Fund |
| Jpmorgan Equity vs. Rbc Emerging Markets | Jpmorgan Equity vs. Nasdaq 100 2x Strategy | Jpmorgan Equity vs. Franklin Emerging Market | Jpmorgan Equity vs. Pace International Emerging |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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