Correlation Between WisdomTree Short and JPM BetaBuilders
Can any of the company-specific risk be diversified away by investing in both WisdomTree Short and JPM BetaBuilders 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 WisdomTree Short and JPM BetaBuilders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Short GBP and JPM BetaBuilders China, you can compare the effects of market volatilities on WisdomTree Short and JPM BetaBuilders 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 WisdomTree Short with a short position of JPM BetaBuilders. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Short and JPM BetaBuilders.
Diversification Opportunities for WisdomTree Short and JPM BetaBuilders
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WisdomTree and JPM is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Short GBP and JPM BetaBuilders China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM BetaBuilders China and WisdomTree Short 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 WisdomTree Short GBP are associated (or correlated) with JPM BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM BetaBuilders China has no effect on the direction of WisdomTree Short i.e., WisdomTree Short and JPM BetaBuilders go up and down completely randomly.
Pair Corralation between WisdomTree Short and JPM BetaBuilders
Assuming the 90 days trading horizon WisdomTree Short is expected to generate 1.2 times less return on investment than JPM BetaBuilders. But when comparing it to its historical volatility, WisdomTree Short GBP is 3.38 times less risky than JPM BetaBuilders. It trades about 0.02 of its potential returns per unit of risk. JPM BetaBuilders China is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9,237 in JPM BetaBuilders China on August 30, 2024 and sell it today you would earn a total of 47.00 from holding JPM BetaBuilders China or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Short GBP vs. JPM BetaBuilders China
Performance |
| Timeline |
| WisdomTree Short GBP |
| JPM BetaBuilders China |
WisdomTree Short and JPM BetaBuilders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Short and JPM BetaBuilders
The main advantage of trading using opposite WisdomTree Short and JPM BetaBuilders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Short position performs unexpectedly, JPM BetaBuilders 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 JPM BetaBuilders will offset losses from the drop in JPM BetaBuilders' long position.| WisdomTree Short vs. WisdomTree Zinc | WisdomTree Short vs. WisdomTree Brent Crude | WisdomTree Short vs. WisdomTree Aluminium 2x | WisdomTree Short vs. WisdomTree Enhanced Commodity |
| JPM BetaBuilders vs. Leverage Shares 3x | JPM BetaBuilders vs. GraniteShares 3x Short | JPM BetaBuilders vs. WisdomTree Natural Gas | JPM BetaBuilders vs. WisdomTree Natural Gas |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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