Correlation Between JPMorgan Fundamental and ProShares UltraPro

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

Diversification Opportunities for JPMorgan Fundamental and ProShares UltraPro

-0.96

Correlation Coefficient

JPMorgan Fundamental  ProShares UltraPro

Pay attention - limited upside

The 3 months correlation between JPMorgan and ProShares is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Fundamental Data and ProShares UltraPro Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro Short 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 UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro Short has no effect on the direction of JPMorgan Fundamental i.e., JPMorgan Fundamental and ProShares UltraPro go up and down completely randomly.

Pair Corralation between JPMorgan Fundamental and ProShares UltraPro

Given the investment horizon of 90 days JPMorgan Fundamental Data is expected to under-perform the ProShares UltraPro. But the etf apears to be less risky and, when comparing its historical volatility, JPMorgan Fundamental Data is 27.48 times less risky than ProShares UltraPro. The etf trades about 0.0 of its potential returns per unit of risk. The ProShares UltraPro Short is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,494  in ProShares UltraPro Short on September 12, 2024 and sell it today you would earn a total of  74.00  from holding ProShares UltraPro Short or generate 4.95% return on investment over 90 days.

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

JPMorgan Fundamental Data  vs.  ProShares UltraPro Short

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.

ProShares UltraPro Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares UltraPro Short has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with JPMorgan Fundamental and ProShares UltraPro

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

The idea behind JPMorgan Fundamental Data and ProShares UltraPro Short 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.