Correlation Between ProShares Trust and JPMorgan

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

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

Diversification Opportunities for ProShares Trust and JPMorgan

0.0

Correlation Coefficient

ProShares Trust  JPMorgan

Pay attention - limited upside

The 3 months correlation between ProShares and JPMorgan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and JPMorgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan and ProShares Trust 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 ProShares Trust are associated (or correlated) with JPMorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan has no effect on the direction of ProShares Trust i.e., ProShares Trust and JPMorgan go up and down completely randomly.

Pair Corralation between ProShares Trust and JPMorgan

If you would invest  2,371  in ProShares Trust on December 30, 2024 and sell it today you would earn a total of  220.00  from holding ProShares Trust or generate 9.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ProShares Trust   vs.  JPMorgan

ProShares Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, ProShares Trust may actually be approaching a critical reversion point that can send shares even higher in April 2025.

JPMorgan

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady primary indicators, JPMorgan is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with ProShares Trust and JPMorgan

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

The idea behind ProShares Trust and JPMorgan 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.