Correlation Between Xtrackers MSCI and JPM Research
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and JPM Research 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 MSCI and JPM Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI World and JPM Research Enhanced, you can compare the effects of market volatilities on Xtrackers MSCI and JPM Research 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 MSCI with a short position of JPM Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and JPM Research.
Diversification Opportunities for Xtrackers MSCI and JPM Research
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xtrackers and JPM is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI World and JPM Research Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM Research Enhanced and Xtrackers MSCI 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 MSCI World are associated (or correlated) with JPM Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM Research Enhanced has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and JPM Research go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and JPM Research
Assuming the 90 days trading horizon Xtrackers MSCI is expected to generate 1.48 times less return on investment than JPM Research. In addition to that, Xtrackers MSCI is 1.82 times more volatile than JPM Research Enhanced. It trades about 0.04 of its total potential returns per unit of risk. JPM Research Enhanced is currently generating about 0.1 per unit of volatility. If you would invest 241,475 in JPM Research Enhanced on November 28, 2024 and sell it today you would earn a total of 22,550 from holding JPM Research Enhanced or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI World vs. JPM Research Enhanced
Performance |
| Timeline |
| Xtrackers MSCI World |
| JPM Research Enhanced |
Xtrackers MSCI and JPM Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and JPM Research
The main advantage of trading using opposite Xtrackers MSCI and JPM Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, JPM Research 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 Research will offset losses from the drop in JPM Research's long position.| Xtrackers MSCI vs. Xtrackers MSCI | Xtrackers MSCI vs. Xtrackers FTSE 250 | Xtrackers MSCI vs. Xtrackers Ie Plc | Xtrackers MSCI vs. Xtrackers Russell 2000 |
| JPM Research vs. Scottish Mortgage Investment | JPM Research vs. VinaCapital Vietnam Opportunity | JPM Research vs. Edinburgh Worldwide Investment | JPM Research vs. Baillie Gifford Growth |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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