Correlation Between JPMorgan BetaBuilders and Gabelli ETFs

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

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

Diversification Opportunities for JPMorgan BetaBuilders and Gabelli ETFs

0.94

Correlation Coefficient

JPMorgan BetaBuilders  Gabelli ETFs

Almost no diversification

The 3 months correlation between JPMorgan and Gabelli is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan BetaBuilders Mid and Gabelli ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli ETFs Trust and JPMorgan BetaBuilders 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 BetaBuilders Mid are associated (or correlated) with Gabelli ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli ETFs Trust has no effect on the direction of JPMorgan BetaBuilders i.e., JPMorgan BetaBuilders and Gabelli ETFs go up and down completely randomly.

Pair Corralation between JPMorgan BetaBuilders and Gabelli ETFs

Given the investment horizon of 90 days JPMorgan BetaBuilders Mid is expected to generate 1.16 times more return on investment than Gabelli ETFs. However, JPMorgan BetaBuilders is 1.16 times more volatile than Gabelli ETFs Trust. It trades about -0.26 of its potential returns per unit of risk. Gabelli ETFs Trust is currently generating about -0.3 per unit of risk. If you would invest  10,274  in JPMorgan BetaBuilders Mid on October 12, 2024 and sell it today you would lose (570.00) from holding JPMorgan BetaBuilders Mid or give up 5.55% of portfolio value over 90 days.

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

JPMorgan BetaBuilders Mid  vs.  Gabelli ETFs Trust

JPMorgan BetaBuilders Mid

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan BetaBuilders Mid are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, JPMorgan BetaBuilders is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Gabelli ETFs Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli ETFs Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Gabelli ETFs is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with JPMorgan BetaBuilders and Gabelli ETFs

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

The idea behind JPMorgan BetaBuilders Mid and Gabelli ETFs Trust 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.