Correlation Between JPMorgan Fundamental and ProShares

Can any of the company-specific risk be diversified away by investing in both JPMorgan Fundamental and ProShares 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 ProShares 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 ProShares SP 500, you can compare the effects of market volatilities on JPMorgan Fundamental and ProShares 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 ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Fundamental and ProShares.

Diversification Opportunities for JPMorgan Fundamental and ProShares

0.77

Correlation Coefficient

JPMorgan Fundamental  ProShares

Poor diversification

The 3 months correlation between JPMorgan and ProShares is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Fundamental Data and ProShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP 500 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 ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP 500 has no effect on the direction of JPMorgan Fundamental i.e., JPMorgan Fundamental and ProShares go up and down completely randomly.

Pair Corralation between JPMorgan Fundamental and ProShares

Given the investment horizon of 90 days JPMorgan Fundamental Data is expected to under-perform the ProShares. But the etf apears to be less risky and, when comparing its historical volatility, JPMorgan Fundamental Data is 1.01 times less risky than ProShares. The etf trades about -0.13 of its potential returns per unit of risk. The ProShares SP 500 is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  4,467  in ProShares SP 500 on December 3, 2024 and sell it today you would lose (25.00) from holding ProShares SP 500 or give up 0.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

JPMorgan Fundamental Data  vs.  ProShares SP 500

JPMorgan Fundamental Data

Risk-Adjusted Performance

Very Weak

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

ProShares SP 500

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares SP 500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ProShares is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JPMorgan Fundamental and ProShares

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

The idea behind JPMorgan Fundamental Data and ProShares SP 500 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.