Correlation Between JPMorgan ETFs and 21Shares Polkadot

Can any of the company-specific risk be diversified away by investing in both JPMorgan ETFs and 21Shares Polkadot 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 JPMorgan ETFs and 21Shares Polkadot into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JPMorgan ETFs ICAV and 21Shares Polkadot ETP, you can compare the effects of market volatilities on JPMorgan ETFs and 21Shares Polkadot 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 JPMorgan ETFs with a short position of 21Shares Polkadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan ETFs and 21Shares Polkadot.

Diversification Opportunities for JPMorgan ETFs and 21Shares Polkadot

0.83

Correlation Coefficient

JPMorgan ETFs  21Shares Polkadot

Very poor diversification

The 3 months correlation between JPMorgan and 21Shares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan ETFs ICAV and 21Shares Polkadot ETP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21Shares Polkadot ETP and JPMorgan ETFs 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 JPMorgan ETFs ICAV are associated (or correlated) with 21Shares Polkadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21Shares Polkadot ETP has no effect on the direction of JPMorgan ETFs i.e., JPMorgan ETFs and 21Shares Polkadot go up and down completely randomly.

Pair Corralation between JPMorgan ETFs and 21Shares Polkadot

Assuming the 90 days trading horizon JPMorgan ETFs is expected to generate 52.82 times less return on investment than 21Shares Polkadot. But when comparing it to its historical volatility, JPMorgan ETFs ICAV is 29.94 times less risky than 21Shares Polkadot. It trades about 0.11 of its potential returns per unit of risk. 21Shares Polkadot ETP is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  219.00  in 21Shares Polkadot ETP on September 13, 2024 and sell it today you would earn a total of  243.00  from holding 21Shares Polkadot ETP or generate 110.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

JPMorgan ETFs ICAV  vs.  21Shares Polkadot ETP

JPMorgan ETFs ICAV

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan ETFs ICAV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, JPMorgan ETFs is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

21Shares Polkadot ETP

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Polkadot ETP are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, 21Shares Polkadot showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan ETFs and 21Shares Polkadot

The main advantage of trading using opposite JPMorgan ETFs and 21Shares Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan ETFs position performs unexpectedly, 21Shares Polkadot 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 21Shares Polkadot will offset losses from the drop in 21Shares Polkadot's long position.

The idea behind JPMorgan ETFs ICAV and 21Shares Polkadot ETP 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.