Correlation Between JPMorgan Nasdaq and REX FANG

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

Diversification Opportunities for JPMorgan Nasdaq and REX FANG

0.92

Correlation Coefficient

JPMorgan Nasdaq  REX FANG

Almost no diversification

The 3 months correlation between JPMorgan and REX is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Nasdaq Equity and REX FANG Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REX FANG Innovation 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 REX FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REX FANG Innovation has no effect on the direction of JPMorgan Nasdaq i.e., JPMorgan Nasdaq and REX FANG go up and down completely randomly.

Pair Corralation between JPMorgan Nasdaq and REX FANG

Given the investment horizon of 90 days JPMorgan Nasdaq Equity is expected to generate 0.78 times more return on investment than REX FANG. However, JPMorgan Nasdaq Equity is 1.28 times less risky than REX FANG. It trades about -0.08 of its potential returns per unit of risk. REX FANG Innovation is currently generating about -0.08 per unit of risk. If you would invest  5,542  in JPMorgan Nasdaq Equity on December 19, 2024 and sell it today you would lose (327.00) from holding JPMorgan Nasdaq Equity or give up 5.9% of portfolio value over 90 days.

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

JPMorgan Nasdaq Equity  vs.  REX FANG Innovation

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.

REX FANG Innovation

Risk-Adjusted Performance

Very Weak

Over the last 90 days REX FANG Innovation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

Pair Trading with JPMorgan Nasdaq and REX FANG

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

The idea behind JPMorgan Nasdaq Equity and REX FANG Innovation 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..