Correlation Between Main International and JPMorgan Nasdaq

Can any of the company-specific risk be diversified away by investing in both Main International and JPMorgan Nasdaq 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 Nasdaq 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 Nasdaq Equity, you can compare the effects of market volatilities on Main International and JPMorgan Nasdaq 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 Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main International and JPMorgan Nasdaq.

Diversification Opportunities for Main International and JPMorgan Nasdaq

-0.31

Correlation Coefficient

Main International  JPMorgan Nasdaq

Very good diversification

The 3 months correlation between Main and JPMorgan is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Main International ETF and JPMorgan Nasdaq Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Nasdaq Equity 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 Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Nasdaq Equity has no effect on the direction of Main International i.e., Main International and JPMorgan Nasdaq go up and down completely randomly.

Pair Corralation between Main International and JPMorgan Nasdaq

Given the investment horizon of 90 days Main International ETF is expected to generate 0.84 times more return on investment than JPMorgan Nasdaq. However, Main International ETF is 1.19 times less risky than JPMorgan Nasdaq. It trades about 0.15 of its potential returns per unit of risk. JPMorgan Nasdaq Equity is currently generating about -0.08 per unit of risk. If you would invest  2,220  in Main International ETF on December 20, 2024 and sell it today you would earn a total of  196.00  from holding Main International ETF or generate 8.83% return on investment over 90 days.

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

Main International ETF  vs.  JPMorgan Nasdaq Equity

Main International ETF

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Main International ETF are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Main International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

JPMorgan Nasdaq Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan Nasdaq Equity has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, JPMorgan Nasdaq is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Main International and JPMorgan Nasdaq

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

The idea behind Main International ETF and JPMorgan Nasdaq Equity 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.