Correlation Between Inverse Nasdaq-100 and Jpmorgan Smartretirement

Can any of the company-specific risk be diversified away by investing in both Inverse Nasdaq-100 and Jpmorgan Smartretirement 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 Inverse Nasdaq-100 and Jpmorgan Smartretirement into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inverse Nasdaq 100 Strategy and Jpmorgan Smartretirement 2020, you can compare the effects of market volatilities on Inverse Nasdaq-100 and Jpmorgan Smartretirement 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 Inverse Nasdaq-100 with a short position of Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Nasdaq-100 and Jpmorgan Smartretirement.

Diversification Opportunities for Inverse Nasdaq-100 and Jpmorgan Smartretirement

-0.12

Correlation Coefficient

Inverse Nasdaq-100  Jpmorgan Smartretirement

Good diversification

The 3 months correlation between Inverse and Jpmorgan is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Nasdaq 100 Strategy and Jpmorgan Smartretirement 2020 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement and Inverse Nasdaq-100 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 Inverse Nasdaq 100 Strategy are associated (or correlated) with Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of Inverse Nasdaq-100 i.e., Inverse Nasdaq-100 and Jpmorgan Smartretirement go up and down completely randomly.

Pair Corralation between Inverse Nasdaq-100 and Jpmorgan Smartretirement

Assuming the 90 days horizon Inverse Nasdaq-100 is expected to generate 2.64 times less return on investment than Jpmorgan Smartretirement. In addition to that, Inverse Nasdaq-100 is 2.79 times more volatile than Jpmorgan Smartretirement 2020. It trades about 0.02 of its total potential returns per unit of risk. Jpmorgan Smartretirement 2020 is currently generating about 0.14 per unit of volatility. If you would invest  1,570  in Jpmorgan Smartretirement 2020 on October 27, 2024 and sell it today you would earn a total of  17.00  from holding Jpmorgan Smartretirement 2020 or generate 1.08% return on investment over 90 days.

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

Inverse Nasdaq 100 Strategy  vs.  Jpmorgan Smartretirement 2020

Inverse Nasdaq 100

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inverse Nasdaq 100 Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Inverse Nasdaq-100 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan Smartretirement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Smartretirement 2020 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan Smartretirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inverse Nasdaq-100 and Jpmorgan Smartretirement

The main advantage of trading using opposite Inverse Nasdaq-100 and Jpmorgan Smartretirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Nasdaq-100 position performs unexpectedly, Jpmorgan Smartretirement 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 Smartretirement will offset losses from the drop in Jpmorgan Smartretirement's long position.

The idea behind Inverse Nasdaq 100 Strategy and Jpmorgan Smartretirement 2020 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.

Check out your portfolio center.

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 Anywhere module to track or share privately all of your investments from the convenience of any device.