Correlation Between JPMorgan Ultra and Defiance Next

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

By analyzing existing cross correlation between JPMorgan Ultra Short Income and Defiance Next Gen, you can compare the effects of market volatilities on JPMorgan Ultra and Defiance Next 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 Ultra with a short position of Defiance Next. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Ultra and Defiance Next.

Diversification Opportunities for JPMorgan Ultra and Defiance Next

-0.81

Correlation Coefficient

JPMorgan Ultra  Defiance Next

Pay attention - limited upside

The 3 months correlation between JPMorgan and Defiance is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Ultra Short Income and Defiance Next Gen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Next Gen and JPMorgan Ultra 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 Ultra Short Income are associated (or correlated) with Defiance Next. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Next Gen has no effect on the direction of JPMorgan Ultra i.e., JPMorgan Ultra and Defiance Next go up and down completely randomly.

Pair Corralation between JPMorgan Ultra and Defiance Next

Given the investment horizon of 90 days JPMorgan Ultra Short Income is expected to generate 0.01 times more return on investment than Defiance Next. However, JPMorgan Ultra Short Income is 68.42 times less risky than Defiance Next. It trades about 0.6 of its potential returns per unit of risk. Defiance Next Gen is currently generating about -0.15 per unit of risk. If you would invest  5,000  in JPMorgan Ultra Short Income on December 30, 2024 and sell it today you would earn a total of  62.00  from holding JPMorgan Ultra Short Income or generate 1.24% return on investment over 90 days.

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

JPMorgan Ultra Short Income  vs.  Defiance Next Gen

JPMorgan Ultra Short

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Ultra Short Income are ranked lower than 47 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JPMorgan Ultra is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Defiance Next Gen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Defiance Next Gen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with JPMorgan Ultra and Defiance Next

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

The idea behind JPMorgan Ultra Short Income and Defiance Next Gen 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.