Correlation Between WisdomTree International and JPMorgan Tech

Can any of the company-specific risk be diversified away by investing in both WisdomTree International and JPMorgan Tech 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 International and JPMorgan Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WisdomTree International Al and JPMorgan Tech Leaders, you can compare the effects of market volatilities on WisdomTree International and JPMorgan Tech 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 International with a short position of JPMorgan Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and JPMorgan Tech.

Diversification Opportunities for WisdomTree International and JPMorgan Tech

-0.57

Correlation Coefficient

WisdomTree International  JPMorgan Tech

Excellent diversification

The 3 months correlation between WisdomTree and JPMorgan is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Al and JPMorgan Tech Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Tech Leaders and WisdomTree International 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 International Al are associated (or correlated) with JPMorgan Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Tech Leaders has no effect on the direction of WisdomTree International i.e., WisdomTree International and JPMorgan Tech go up and down completely randomly.

Pair Corralation between WisdomTree International and JPMorgan Tech

Given the investment horizon of 90 days WisdomTree International Al is expected to generate 0.38 times more return on investment than JPMorgan Tech. However, WisdomTree International Al is 2.61 times less risky than JPMorgan Tech. It trades about 0.24 of its potential returns per unit of risk. JPMorgan Tech Leaders is currently generating about -0.08 per unit of risk. If you would invest  3,919  in WisdomTree International Al on December 30, 2024 and sell it today you would earn a total of  488.00  from holding WisdomTree International Al or generate 12.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

WisdomTree International Al  vs.  JPMorgan Tech Leaders

WisdomTree International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree International Al are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, WisdomTree International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

JPMorgan Tech Leaders

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan Tech Leaders has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Etf's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Pair Trading with WisdomTree International and JPMorgan Tech

The main advantage of trading using opposite WisdomTree International and JPMorgan Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, JPMorgan Tech 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 Tech will offset losses from the drop in JPMorgan Tech's long position.

The idea behind WisdomTree International Al and JPMorgan Tech Leaders pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.