Correlation Between Wisdomtree Siegel and Jpmorgan Small

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

By analyzing existing cross correlation between Wisdomtree Siegel Global and Jpmorgan Small Cap, you can compare the effects of market volatilities on Wisdomtree Siegel and Jpmorgan Small 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 Wisdomtree Siegel with a short position of Jpmorgan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisdomtree Siegel and Jpmorgan Small.

Diversification Opportunities for Wisdomtree Siegel and Jpmorgan Small

0.74

Correlation Coefficient

Wisdomtree Siegel  Jpmorgan Small

Poor diversification

The 3 months correlation between Wisdomtree and Jpmorgan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wisdomtree Siegel Global and Jpmorgan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Small Cap and Wisdomtree Siegel 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 Wisdomtree Siegel Global are associated (or correlated) with Jpmorgan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Small Cap has no effect on the direction of Wisdomtree Siegel i.e., Wisdomtree Siegel and Jpmorgan Small go up and down completely randomly.

Pair Corralation between Wisdomtree Siegel and Jpmorgan Small

Assuming the 90 days horizon Wisdomtree Siegel Global is expected to under-perform the Jpmorgan Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Wisdomtree Siegel Global is 2.08 times less risky than Jpmorgan Small. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Jpmorgan Small Cap is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,452  in Jpmorgan Small Cap on October 10, 2024 and sell it today you would earn a total of  294.00  from holding Jpmorgan Small Cap or generate 11.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	10.91%
Values	Daily Returns

Wisdomtree Siegel Global  vs.  Jpmorgan Small Cap

Wisdomtree Siegel Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wisdomtree Siegel Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Wisdomtree Siegel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Wisdomtree Siegel and Jpmorgan Small

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

The idea behind Wisdomtree Siegel Global and Jpmorgan Small Cap 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.