Correlation Between Pacer Global and JP Morgan

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

By analyzing existing cross correlation between Pacer Global Cash and JP Morgan Exchange Traded, you can compare the effects of market volatilities on Pacer Global and JP Morgan 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 Pacer Global with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Global and JP Morgan.

Diversification Opportunities for Pacer Global and JP Morgan

0.61

Correlation Coefficient

Pacer Global  JP Morgan

Poor diversification

The 3 months correlation between Pacer and JDIV is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Global Cash and JP Morgan Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Exchange and Pacer Global 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 Pacer Global Cash are associated (or correlated) with JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Exchange has no effect on the direction of Pacer Global i.e., Pacer Global and JP Morgan go up and down completely randomly.

Pair Corralation between Pacer Global and JP Morgan

Given the investment horizon of 90 days Pacer Global Cash is expected to generate 0.91 times more return on investment than JP Morgan. However, Pacer Global Cash is 1.1 times less risky than JP Morgan. It trades about 0.29 of its potential returns per unit of risk. JP Morgan Exchange Traded is currently generating about 0.09 per unit of risk. If you would invest  3,352  in Pacer Global Cash on December 28, 2024 and sell it today you would earn a total of  377.00  from holding Pacer Global Cash or generate 11.25% return on investment over 90 days.

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

Pacer Global Cash  vs.  JP Morgan Exchange Traded

Pacer Global Cash

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Global Cash are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Pacer Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

JP Morgan Exchange

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JP Morgan Exchange Traded are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable forward indicators, JP Morgan 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 Pacer Global and JP Morgan

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

The idea behind Pacer Global Cash and JP Morgan Exchange Traded 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 Stocks Directory module to find actively traded stocks across global markets.