Correlation Between JPMorgan Nasdaq and Pacer Cash

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

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

Diversification Opportunities for JPMorgan Nasdaq and Pacer Cash

0.87

Correlation Coefficient

JPMorgan Nasdaq  Pacer Cash

Very poor diversification

The 3 months correlation between JPMorgan and Pacer is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Nasdaq Equity and Pacer Cash Cows in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Cash Cows and JPMorgan Nasdaq 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 Nasdaq Equity are associated (or correlated) with Pacer Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Cash Cows has no effect on the direction of JPMorgan Nasdaq i.e., JPMorgan Nasdaq and Pacer Cash go up and down completely randomly.

Pair Corralation between JPMorgan Nasdaq and Pacer Cash

Given the investment horizon of 90 days JPMorgan Nasdaq Equity is expected to under-perform the Pacer Cash. In addition to that, JPMorgan Nasdaq is 1.32 times more volatile than Pacer Cash Cows. It trades about -0.1 of its total potential returns per unit of risk. Pacer Cash Cows is currently generating about -0.05 per unit of volatility. If you would invest  5,593  in Pacer Cash Cows on December 29, 2024 and sell it today you would lose (159.00) from holding Pacer Cash Cows or give up 2.84% of portfolio value over 90 days.

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

JPMorgan Nasdaq Equity  vs.  Pacer Cash Cows

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 latest inconsistent performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pacer Cash Cows

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pacer Cash Cows has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Pacer Cash is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JPMorgan Nasdaq and Pacer Cash

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

The idea behind JPMorgan Nasdaq Equity and Pacer Cash Cows 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.