Correlation Between Main International and JPMorgan Active

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

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

Diversification Opportunities for Main International and JPMorgan Active

-0.45

Correlation Coefficient

Main International  JPMorgan Active

Very good diversification

The 3 months correlation between Main and JPMorgan is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Main International ETF and JPMorgan Active Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Active Value and Main International 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 Main International ETF are associated (or correlated) with JPMorgan Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Active Value has no effect on the direction of Main International i.e., Main International and JPMorgan Active go up and down completely randomly.

Pair Corralation between Main International and JPMorgan Active

Given the investment horizon of 90 days Main International is expected to generate 5.08 times less return on investment than JPMorgan Active. In addition to that, Main International is 1.23 times more volatile than JPMorgan Active Value. It trades about 0.01 of its total potential returns per unit of risk. JPMorgan Active Value is currently generating about 0.08 per unit of volatility. If you would invest  5,794  in JPMorgan Active Value on September 20, 2024 and sell it today you would earn a total of  550.00  from holding JPMorgan Active Value or generate 9.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Main International ETF  vs.  JPMorgan Active Value

Main International ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Main International ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Main International is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

JPMorgan Active Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Active Value has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, JPMorgan Active is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Main International and JPMorgan Active

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

The idea behind Main International ETF and JPMorgan Active Value 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.