Correlation Between VanEck ETF and JPMorgan
Can any of the company-specific risk be diversified away by investing in both VanEck ETF and JPMorgan 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 VanEck ETF and JPMorgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck ETF Trust and JPMorgan, you can compare the effects of market volatilities on VanEck ETF and JPMorgan 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 VanEck ETF with a short position of JPMorgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck ETF and JPMorgan.
Diversification Opportunities for VanEck ETF and JPMorgan
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VanEck and JPMorgan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding VanEck ETF Trust and JPMorgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan and VanEck ETF 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 VanEck ETF Trust are associated (or correlated) with JPMorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan has no effect on the direction of VanEck ETF i.e., VanEck ETF and JPMorgan go up and down completely randomly.
Pair Corralation between VanEck ETF and JPMorgan
Given the investment horizon of 90 days VanEck ETF is expected to generate 1.11 times less return on investment than JPMorgan. In addition to that, VanEck ETF is 1.33 times more volatile than JPMorgan. It trades about 0.06 of its total potential returns per unit of risk. JPMorgan is currently generating about 0.1 per unit of volatility. If you would invest 5,032 in JPMorgan on August 30, 2024 and sell it today you would earn a total of 596.00 from holding JPMorgan or generate 11.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.05% |
| Values | Daily Returns |
VanEck ETF Trust vs. JPMorgan
Performance |
| Timeline |
| VanEck ETF Trust |
| JPMorgan |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
VanEck ETF and JPMorgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck ETF and JPMorgan
The main advantage of trading using opposite VanEck ETF and JPMorgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck ETF position performs unexpectedly, JPMorgan 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 will offset losses from the drop in JPMorgan's long position.| VanEck ETF vs. VanEck Morningstar International | VanEck ETF vs. VanEck Vectors ETF | VanEck ETF vs. VanEck Morningstar Wide | VanEck ETF vs. VanEck Inflation Allocation |
| JPMorgan vs. Vanguard Total Stock | JPMorgan vs. SPDR SP 500 | JPMorgan vs. iShares Core SP | JPMorgan vs. Vanguard Total 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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