Correlation Between JPMorgan Diversified and Xtrackers FTSE

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

By analyzing existing cross correlation between JPMorgan Diversified Return and Xtrackers FTSE Developed, you can compare the effects of market volatilities on JPMorgan Diversified and Xtrackers FTSE 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 Diversified with a short position of Xtrackers FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Diversified and Xtrackers FTSE.

Diversification Opportunities for JPMorgan Diversified and Xtrackers FTSE

0.04

Correlation Coefficient

JPMorgan Diversified  Xtrackers FTSE

Significant diversification

The 3 months correlation between JPMorgan and Xtrackers is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Diversified Return and Xtrackers FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers FTSE Developed and JPMorgan Diversified 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 Diversified Return are associated (or correlated) with Xtrackers FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers FTSE Developed has no effect on the direction of JPMorgan Diversified i.e., JPMorgan Diversified and Xtrackers FTSE go up and down completely randomly.

Pair Corralation between JPMorgan Diversified and Xtrackers FTSE

Given the investment horizon of 90 days JPMorgan Diversified Return is expected to under-perform the Xtrackers FTSE. But the etf apears to be less risky and, when comparing its historical volatility, JPMorgan Diversified Return is 1.12 times less risky than Xtrackers FTSE. The etf trades about 0.0 of its potential returns per unit of risk. The Xtrackers FTSE Developed is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,827  in Xtrackers FTSE Developed on December 22, 2024 and sell it today you would earn a total of  216.00  from holding Xtrackers FTSE Developed or generate 7.64% return on investment over 90 days.

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

JPMorgan Diversified Return  vs.  Xtrackers FTSE Developed

JPMorgan Diversified

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan Diversified Return has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, JPMorgan Diversified is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Xtrackers FTSE Developed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers FTSE Developed are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Xtrackers FTSE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with JPMorgan Diversified and Xtrackers FTSE

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

The idea behind JPMorgan Diversified Return and Xtrackers FTSE Developed 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.

Check out your portfolio center.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.