Correlation Between JPMorgan BetaBuilders and Innovator Capital

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

By analyzing existing cross correlation between JPMorgan BetaBuilders Small and Innovator Capital Management, you can compare the effects of market volatilities on JPMorgan BetaBuilders and Innovator Capital 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 Innovator Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan BetaBuilders and Innovator Capital.

Diversification Opportunities for JPMorgan BetaBuilders and Innovator Capital

0.5

Correlation Coefficient

JPMorgan BetaBuilders  Innovator Capital

Very weak diversification

The 3 months correlation between JPMorgan and Innovator is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan BetaBuilders Small and Innovator Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Capital 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 Small are associated (or correlated) with Innovator Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Capital has no effect on the direction of JPMorgan BetaBuilders i.e., JPMorgan BetaBuilders and Innovator Capital go up and down completely randomly.

Pair Corralation between JPMorgan BetaBuilders and Innovator Capital

If you would invest  5,804  in JPMorgan BetaBuilders Small on October 12, 2024 and sell it today you would earn a total of  1,023  from holding JPMorgan BetaBuilders Small or generate 17.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.53%
Values	Daily Returns

JPMorgan BetaBuilders Small  vs.  Innovator Capital Management

JPMorgan BetaBuilders

Risk-Adjusted Performance

1 of 100

Weak

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

Innovator Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Innovator Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Innovator Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JPMorgan BetaBuilders and Innovator Capital

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

The idea behind JPMorgan BetaBuilders Small and Innovator Capital Management 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.