Correlation Between JPMORGAN ETFS and JPM BetaBuilders

Can any of the company-specific risk be diversified away by investing in both JPMORGAN ETFS and JPM 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 JPM 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 JPM BetaBuilders China, you can compare the effects of market volatilities on JPMORGAN ETFS and JPM 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 JPM BetaBuilders. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMORGAN ETFS and JPM BetaBuilders.

Diversification Opportunities for JPMORGAN ETFS and JPM BetaBuilders

-0.72

Correlation Coefficient

JPMORGAN ETFS  JPM BetaBuilders

Pay attention - limited upside

The 3 months correlation between JPMORGAN and JPM is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding JPMORGAN ETFS ICAV and JPM BetaBuilders China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM BetaBuilders China 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 JPM BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM BetaBuilders China has no effect on the direction of JPMORGAN ETFS i.e., JPMORGAN ETFS and JPM BetaBuilders go up and down completely randomly.

Pair Corralation between JPMORGAN ETFS and JPM BetaBuilders

Assuming the 90 days trading horizon JPMORGAN ETFS ICAV is expected to under-perform the JPM BetaBuilders. In addition to that, JPMORGAN ETFS is 3.71 times more volatile than JPM BetaBuilders China. It trades about -0.01 of its total potential returns per unit of risk. JPM BetaBuilders China is currently generating about 0.27 per unit of volatility. If you would invest  9,333  in JPM BetaBuilders China on October 8, 2024 and sell it today you would earn a total of  65.00  from holding JPM BetaBuilders China or generate 0.7% return on investment over 90 days.

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

JPMORGAN ETFS ICAV  vs.  JPM BetaBuilders China

JPMORGAN ETFS ICAV

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMORGAN ETFS ICAV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, JPMORGAN ETFS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

JPM BetaBuilders China

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with JPMORGAN ETFS and JPM BetaBuilders

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

The idea behind JPMORGAN ETFS ICAV and JPM BetaBuilders China 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.