Correlation Between Salesforce and JPMorgan ETFs

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

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

Diversification Opportunities for Salesforce and JPMorgan ETFs

0.77

Correlation Coefficient

Salesforce  JPMorgan ETFs

Poor diversification

The 3 months correlation between Salesforce and JPMorgan is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and JPMorgan ETFs ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan ETFs ICAV and Salesforce 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 Salesforce are associated (or correlated) with JPMorgan ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan ETFs ICAV has no effect on the direction of Salesforce i.e., Salesforce and JPMorgan ETFs go up and down completely randomly.

Pair Corralation between Salesforce and JPMorgan ETFs

Considering the 90-day investment horizon Salesforce is expected to under-perform the JPMorgan ETFs. In addition to that, Salesforce is 1.11 times more volatile than JPMorgan ETFs ICAV. It trades about -0.25 of its total potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about -0.18 per unit of volatility. If you would invest  5,495  in JPMorgan ETFs ICAV on October 10, 2024 and sell it today you would lose (198.00) from holding JPMorgan ETFs ICAV or give up 3.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	80.95%
Values	Daily Returns

Salesforce  vs.  JPMorgan ETFs ICAV

Salesforce

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.

JPMorgan ETFs ICAV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan ETFs ICAV has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Salesforce and JPMorgan ETFs

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

The idea behind Salesforce and JPMorgan ETFs ICAV 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.