Correlation Between LG DAX and JPMorgan ETFs

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

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

Diversification Opportunities for LG DAX and JPMorgan ETFs

-0.21

Correlation Coefficient

LG DAX  JPMorgan ETFs

Very good diversification

The 3 months correlation between DES2 and JPMorgan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding LG DAX Daily 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 LG DAX 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 LG DAX Daily 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 LG DAX i.e., LG DAX and JPMorgan ETFs go up and down completely randomly.

Pair Corralation between LG DAX and JPMorgan ETFs

If you would invest  9,551  in JPMorgan ETFs ICAV on October 27, 2024 and sell it today you would earn a total of  884.00  from holding JPMorgan ETFs ICAV or generate 9.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.2%
Values	Daily Returns

LG DAX Daily  vs.  JPMorgan ETFs ICAV

LG DAX Daily

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LG DAX Daily has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

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. Despite nearly stable technical and fundamental indicators, JPMorgan ETFs is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with LG DAX and JPMorgan ETFs

The main advantage of trading using opposite LG DAX and JPMorgan ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG DAX 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 LG DAX Daily 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.