Correlation Between JPMorgan ETFs and Leverage Shares

Can any of the company-specific risk be diversified away by investing in both JPMorgan ETFs and Leverage Shares 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 Leverage Shares 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 Leverage Shares 3x, you can compare the effects of market volatilities on JPMorgan ETFs and Leverage Shares 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 Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan ETFs and Leverage Shares.

Diversification Opportunities for JPMorgan ETFs and Leverage Shares

-0.35

Correlation Coefficient

JPMorgan ETFs  Leverage Shares

Very good diversification

The 3 months correlation between JPMorgan and Leverage is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan ETFs ICAV and Leverage Shares 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 3x 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 Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 3x has no effect on the direction of JPMorgan ETFs i.e., JPMorgan ETFs and Leverage Shares go up and down completely randomly.

Pair Corralation between JPMorgan ETFs and Leverage Shares

Assuming the 90 days trading horizon JPMorgan ETFs ICAV is expected to generate 0.04 times more return on investment than Leverage Shares. However, JPMorgan ETFs ICAV is 22.55 times less risky than Leverage Shares. It trades about 0.12 of its potential returns per unit of risk. Leverage Shares 3x is currently generating about -0.13 per unit of risk. If you would invest  313,795  in JPMorgan ETFs ICAV on November 28, 2024 and sell it today you would earn a total of  12,470  from holding JPMorgan ETFs ICAV or generate 3.97% return on investment over 90 days.

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

JPMorgan ETFs ICAV  vs.  Leverage Shares 3x

JPMorgan ETFs ICAV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan ETFs ICAV are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JPMorgan ETFs is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Leverage Shares 3x

Risk-Adjusted Performance

Very Weak

Over the last 90 days Leverage Shares 3x has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with JPMorgan ETFs and Leverage Shares

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

The idea behind JPMorgan ETFs ICAV and Leverage Shares 3x 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.