Correlation Between JPMorgan ETFs and JPMorgan BetaBuilders

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Can any of the company-specific risk be diversified away by investing in both JPMorgan ETFs and JPMorgan BetaBuilders 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 ETFs and JPMorgan BetaBuilders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan ETFs ICAV and JPMorgan BetaBuilders Aggregate, you can compare the effects of market volatilities on JPMorgan ETFs and JPMorgan BetaBuilders 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 ETFs with a short position of JPMorgan BetaBuilders. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan ETFs and JPMorgan BetaBuilders.

Diversification Opportunities for JPMorgan ETFs and JPMorgan BetaBuilders

-0.78
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between JPMorgan and JPMorgan is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan ETFs ICAV and JPMorgan BetaBuilders Aggregat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan BetaBuilders and JPMorgan ETFs 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 ETFs ICAV are associated (or correlated) with JPMorgan BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan BetaBuilders has no effect on the direction of JPMorgan ETFs i.e., JPMorgan ETFs and JPMorgan BetaBuilders go up and down completely randomly.

Pair Corralation between JPMorgan ETFs and JPMorgan BetaBuilders

Assuming the 90 days horizon JPMorgan ETFs ICAV is expected to generate 0.39 times more return on investment than JPMorgan BetaBuilders. However, JPMorgan ETFs ICAV is 2.56 times less risky than JPMorgan BetaBuilders. It trades about 0.17 of its potential returns per unit of risk. JPMorgan BetaBuilders Aggregate is currently generating about -0.07 per unit of risk. If you would invest  9,990  in JPMorgan ETFs ICAV on September 5, 2024 and sell it today you would earn a total of  128.00  from holding JPMorgan ETFs ICAV or generate 1.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy98.44%
ValuesDaily Returns

JPMorgan ETFs ICAV  vs.  JPMorgan BetaBuilders Aggregat

 Performance 
       Timeline  
JPMorgan ETFs ICAV 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan ETFs ICAV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, JPMorgan ETFs is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
JPMorgan BetaBuilders 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days JPMorgan BetaBuilders Aggregate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, JPMorgan BetaBuilders is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

JPMorgan ETFs and JPMorgan BetaBuilders Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JPMorgan ETFs and JPMorgan BetaBuilders

The main advantage of trading using opposite JPMorgan ETFs and JPMorgan BetaBuilders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan ETFs position performs unexpectedly, JPMorgan BetaBuilders 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 JPMorgan BetaBuilders will offset losses from the drop in JPMorgan BetaBuilders' long position.
The idea behind JPMorgan ETFs ICAV and JPMorgan BetaBuilders Aggregate 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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