Correlation Between Direxion Auspice and JPMorgan Climate

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

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

Diversification Opportunities for Direxion Auspice and JPMorgan Climate

0.14

Correlation Coefficient

Direxion Auspice  JPMorgan Climate

Average diversification

The 3 months correlation between Direxion and JPMorgan is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Auspice Broad and JPMorgan Climate Change in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Climate Change and Direxion Auspice 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 Direxion Auspice Broad are associated (or correlated) with JPMorgan Climate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Climate Change has no effect on the direction of Direxion Auspice i.e., Direxion Auspice and JPMorgan Climate go up and down completely randomly.

Pair Corralation between Direxion Auspice and JPMorgan Climate

Considering the 90-day investment horizon Direxion Auspice Broad is expected to generate 0.4 times more return on investment than JPMorgan Climate. However, Direxion Auspice Broad is 2.47 times less risky than JPMorgan Climate. It trades about 0.02 of its potential returns per unit of risk. JPMorgan Climate Change is currently generating about -0.05 per unit of risk. If you would invest  2,854  in Direxion Auspice Broad on September 15, 2024 and sell it today you would earn a total of  9.00  from holding Direxion Auspice Broad or generate 0.32% return on investment over 90 days.

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

Direxion Auspice Broad  vs.  JPMorgan Climate Change

Direxion Auspice Broad

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Direxion Auspice Broad are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Direxion Auspice is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

JPMorgan Climate Change

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Direxion Auspice and JPMorgan Climate

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

The idea behind Direxion Auspice Broad and JPMorgan Climate Change 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.