Correlation Between Xtrackers and JPMorgan ETFs
Can any of the company-specific risk be diversified away by investing in both Xtrackers 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 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 II and JPMorgan ETFs ICAV, you can compare the effects of market volatilities on Xtrackers 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 with a short position of JPMorgan ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and JPMorgan ETFs.
Diversification Opportunities for Xtrackers and JPMorgan ETFs
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and JPMorgan is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers II 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 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 II 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 i.e., Xtrackers and JPMorgan ETFs go up and down completely randomly.
Pair Corralation between Xtrackers and JPMorgan ETFs
Assuming the 90 days trading horizon Xtrackers is expected to generate 6.84 times less return on investment than JPMorgan ETFs. But when comparing it to its historical volatility, Xtrackers II is 2.09 times less risky than JPMorgan ETFs. It trades about 0.07 of its potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,655 in JPMorgan ETFs ICAV on August 31, 2024 and sell it today you would earn a total of 231.00 from holding JPMorgan ETFs ICAV or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xtrackers II vs. JPMorgan ETFs ICAV
Performance |
| Timeline |
| Xtrackers II |
| JPMorgan ETFs ICAV |
Xtrackers and JPMorgan ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and JPMorgan ETFs
The main advantage of trading using opposite Xtrackers and JPMorgan ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers 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 vs. UBS Fund Solutions | Xtrackers vs. Xtrackers Nikkei 225 | Xtrackers vs. iShares VII PLC | Xtrackers vs. Vanguard Funds Public |
| JPMorgan ETFs vs. JPMorgan ETFs ICAV | JPMorgan ETFs vs. JPMorgan ETFs ICAV | JPMorgan ETFs vs. JPMorgan ETFs ICAV | JPMorgan ETFs vs. JPMorgan ETFs ICAV |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |