Correlation Between SPDR SP and JP Morgan
Can any of the company-specific risk be diversified away by investing in both SPDR SP and JP Morgan 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 SPDR SP and JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and JP Morgan Exchange Traded, you can compare the effects of market volatilities on SPDR SP and JP Morgan 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 SPDR SP with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and JP Morgan.
Diversification Opportunities for SPDR SP and JP Morgan
Very good diversification
The 3 months correlation between SPDR and BBSB is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and JP Morgan Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Exchange and SPDR SP 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 SPDR SP 500 are associated (or correlated) with JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Exchange has no effect on the direction of SPDR SP i.e., SPDR SP and JP Morgan go up and down completely randomly.
Pair Corralation between SPDR SP and JP Morgan
Considering the 90-day investment horizon SPDR SP 500 is expected to generate 7.12 times more return on investment than JP Morgan. However, SPDR SP is 7.12 times more volatile than JP Morgan Exchange Traded. It trades about 0.14 of its potential returns per unit of risk. JP Morgan Exchange Traded is currently generating about 0.13 per unit of risk. If you would invest 47,087 in SPDR SP 500 on August 25, 2024 and sell it today you would earn a total of 12,464 from holding SPDR SP 500 or generate 26.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. JP Morgan Exchange Traded
Performance |
| Timeline |
| SPDR SP 500 |
| JP Morgan Exchange |
SPDR SP and JP Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and JP Morgan
The main advantage of trading using opposite SPDR SP and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, JP Morgan 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 JP Morgan will offset losses from the drop in JP Morgan's long position.| SPDR SP vs. FT Vest Equity | SPDR SP vs. Northern Lights | SPDR SP vs. Dimensional International High | SPDR SP vs. First Trust Exchange Traded |
| JP Morgan vs. SPDR Barclays Short | JP Morgan vs. iShares Agency Bond | JP Morgan vs. Rbb Fund | JP Morgan vs. Bondbloxx ETF Trust |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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