Correlation Between WisdomTree Managed and JP Morgan
Can any of the company-specific risk be diversified away by investing in both WisdomTree Managed 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 WisdomTree Managed and JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Managed Futures and JP Morgan Exchange Traded, you can compare the effects of market volatilities on WisdomTree Managed 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 WisdomTree Managed with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Managed and JP Morgan.
Diversification Opportunities for WisdomTree Managed and JP Morgan
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and JADE is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures 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 WisdomTree Managed 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 Managed Futures 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 WisdomTree Managed i.e., WisdomTree Managed and JP Morgan go up and down completely randomly.
Pair Corralation between WisdomTree Managed and JP Morgan
Given the investment horizon of 90 days WisdomTree Managed Futures is expected to generate 0.58 times more return on investment than JP Morgan. However, WisdomTree Managed Futures is 1.72 times less risky than JP Morgan. It trades about 0.03 of its potential returns per unit of risk. JP Morgan Exchange Traded is currently generating about 0.0 per unit of risk. If you would invest 3,423 in WisdomTree Managed Futures on August 29, 2024 and sell it today you would earn a total of 143.00 from holding WisdomTree Managed Futures or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 64.59% |
| Values | Daily Returns |
WisdomTree Managed Futures vs. JP Morgan Exchange Traded
Performance |
| Timeline |
| WisdomTree Managed |
| JP Morgan Exchange |
WisdomTree Managed and JP Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Managed and JP Morgan
The main advantage of trading using opposite WisdomTree Managed and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Managed 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.| WisdomTree Managed vs. First Trust Managed | WisdomTree Managed vs. iMGP DBi Managed | WisdomTree Managed vs. First Trust LongShort | WisdomTree Managed vs. WisdomTree CBOE SP |
| JP Morgan vs. Freedom Day Dividend | JP Morgan vs. Franklin Templeton ETF | JP Morgan vs. iShares MSCI China | JP Morgan vs. Tidal Trust II |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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