Correlation Between JPMorgan Active and Main International

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

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

Diversification Opportunities for JPMorgan Active and Main International

-0.45

Correlation Coefficient

JPMorgan Active  Main International

Very good diversification

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

Pair Corralation between JPMorgan Active and Main International

Given the investment horizon of 90 days JPMorgan Active Value is expected to under-perform the Main International. In addition to that, JPMorgan Active is 1.1 times more volatile than Main International ETF. It trades about -0.28 of its total potential returns per unit of risk. Main International ETF is currently generating about 0.02 per unit of volatility. If you would invest  2,256  in Main International ETF on September 20, 2024 and sell it today you would earn a total of  6.00  from holding Main International ETF or generate 0.27% return on investment over 90 days.

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

JPMorgan Active Value  vs.  Main International ETF

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.

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.

Pair Trading with JPMorgan Active and Main International

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

The idea behind JPMorgan Active Value and Main International ETF 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.