Correlation Between Xtrackers Nikkei and JPMorgan ETFs
Can any of the company-specific risk be diversified away by investing in both Xtrackers Nikkei and JPMorgan ETFs 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 Xtrackers Nikkei and JPMorgan ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Nikkei 225 and JPMorgan ETFs ICAV, you can compare the effects of market volatilities on Xtrackers Nikkei and JPMorgan ETFs 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 Xtrackers Nikkei with a short position of JPMorgan ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Nikkei and JPMorgan ETFs.
Diversification Opportunities for Xtrackers Nikkei and JPMorgan ETFs
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xtrackers and JPMorgan is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Nikkei 225 and JPMorgan ETFs ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan ETFs ICAV and Xtrackers Nikkei 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 Xtrackers Nikkei 225 are associated (or correlated) with JPMorgan ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan ETFs ICAV has no effect on the direction of Xtrackers Nikkei i.e., Xtrackers Nikkei and JPMorgan ETFs go up and down completely randomly.
Pair Corralation between Xtrackers Nikkei and JPMorgan ETFs
Assuming the 90 days trading horizon Xtrackers Nikkei is expected to generate 3.6 times less return on investment than JPMorgan ETFs. In addition to that, Xtrackers Nikkei is 3.27 times more volatile than JPMorgan ETFs ICAV. It trades about 0.02 of its total potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about 0.18 per unit of volatility. If you would invest 9,156 in JPMorgan ETFs ICAV on September 2, 2024 and sell it today you would earn a total of 409.00 from holding JPMorgan ETFs ICAV or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Nikkei 225 vs. JPMorgan ETFs ICAV
Performance |
| Timeline |
| Xtrackers Nikkei 225 |
| JPMorgan ETFs ICAV |
Xtrackers Nikkei and JPMorgan ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Nikkei and JPMorgan ETFs
The main advantage of trading using opposite Xtrackers Nikkei and JPMorgan ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Nikkei position performs unexpectedly, JPMorgan ETFs 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 ETFs will offset losses from the drop in JPMorgan ETFs' long position.| Xtrackers Nikkei vs. UBS Fund Solutions | Xtrackers Nikkei vs. Vanguard Funds Public | Xtrackers Nikkei vs. iShares Core SP | Xtrackers Nikkei vs. iShares Core MSCI |
| JPMorgan ETFs vs. UBS Fund Solutions | JPMorgan ETFs vs. Vanguard Funds Public | JPMorgan ETFs vs. iShares Core SP | JPMorgan ETFs vs. iShares Core MSCI |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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