Correlation Between JPMorgan Fundamental and Global X

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

By analyzing existing cross correlation between JPMorgan Fundamental Data and Global X Funds, you can compare the effects of market volatilities on JPMorgan Fundamental and Global X 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 Fundamental with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Fundamental and Global X.

Diversification Opportunities for JPMorgan Fundamental and Global X

0.94

Correlation Coefficient

JPMorgan Fundamental  Global X

Almost no diversification

The 3 months correlation between JPMorgan and Global is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Fundamental Data and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and JPMorgan Fundamental 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 Fundamental Data are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of JPMorgan Fundamental i.e., JPMorgan Fundamental and Global X go up and down completely randomly.

Pair Corralation between JPMorgan Fundamental and Global X

Given the investment horizon of 90 days JPMorgan Fundamental Data is expected to generate 1.08 times more return on investment than Global X. However, JPMorgan Fundamental is 1.08 times more volatile than Global X Funds. It trades about 0.4 of its potential returns per unit of risk. Global X Funds is currently generating about 0.34 per unit of risk. If you would invest  5,549  in JPMorgan Fundamental Data on September 4, 2024 and sell it today you would earn a total of  445.00  from holding JPMorgan Fundamental Data or generate 8.02% return on investment over 90 days.

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

JPMorgan Fundamental Data  vs.  Global X Funds

JPMorgan Fundamental Data

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Fundamental Data are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, JPMorgan Fundamental may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global X Funds

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JPMorgan Fundamental and Global X

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

The idea behind JPMorgan Fundamental Data and Global X Funds 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.