Correlation Between JP Morgan and Global X

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

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

Diversification Opportunities for JP Morgan and Global X

0.42

Correlation Coefficient

JP Morgan  Global X

Very weak diversification

The 3 months correlation between JADE and Global is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Exchange Traded and Global X MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MSCI and JP Morgan 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 JP Morgan Exchange Traded are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X MSCI has no effect on the direction of JP Morgan i.e., JP Morgan and Global X go up and down completely randomly.

Pair Corralation between JP Morgan and Global X

Given the investment horizon of 90 days JP Morgan Exchange Traded is expected to generate 1.31 times more return on investment than Global X. However, JP Morgan is 1.31 times more volatile than Global X MSCI. It trades about 0.04 of its potential returns per unit of risk. Global X MSCI is currently generating about -0.09 per unit of risk. If you would invest  4,751  in JP Morgan Exchange Traded on September 14, 2024 and sell it today you would earn a total of  115.90  from holding JP Morgan Exchange Traded or generate 2.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

JP Morgan Exchange Traded  vs.  Global X MSCI

JP Morgan Exchange

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JP Morgan Exchange Traded are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, JP Morgan is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Global X MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Global X is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JP Morgan and Global X

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

The idea behind JP Morgan Exchange Traded and Global X MSCI 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.