Correlation Between Global X and JPMorgan

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

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

Diversification Opportunities for Global X and JPMorgan

0.0

Correlation Coefficient

Global X  JPMorgan

Pay attention - limited upside

The 3 months correlation between Global and JPMorgan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global X MLP and JPMorgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan and Global X 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 Global X MLP are associated (or correlated) with JPMorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan has no effect on the direction of Global X i.e., Global X and JPMorgan go up and down completely randomly.

Pair Corralation between Global X and JPMorgan

If you would invest  4,216  in Global X MLP on October 10, 2024 and sell it today you would earn a total of  2,037  from holding Global X MLP or generate 48.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Global X MLP  vs.  JPMorgan

Global X MLP

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X MLP are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in February 2025.

JPMorgan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, JPMorgan is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Global X and JPMorgan

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

The idea behind Global X MLP and JPMorgan 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.