Correlation Between Xtrackers Short and JPMorgan Core

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

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

Diversification Opportunities for Xtrackers Short and JPMorgan Core

-0.43

Correlation Coefficient

Xtrackers Short  JPMorgan Core

Very good diversification

The 3 months correlation between Xtrackers and JPMorgan is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Short Duration and JPMorgan Core Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Core Plus and Xtrackers Short 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 Xtrackers Short Duration are associated (or correlated) with JPMorgan Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Core Plus has no effect on the direction of Xtrackers Short i.e., Xtrackers Short and JPMorgan Core go up and down completely randomly.

Pair Corralation between Xtrackers Short and JPMorgan Core

Given the investment horizon of 90 days Xtrackers Short Duration is expected to generate 0.59 times more return on investment than JPMorgan Core. However, Xtrackers Short Duration is 1.7 times less risky than JPMorgan Core. It trades about 0.28 of its potential returns per unit of risk. JPMorgan Core Plus is currently generating about -0.02 per unit of risk. If you would invest  4,411  in Xtrackers Short Duration on September 1, 2024 and sell it today you would earn a total of  136.00  from holding Xtrackers Short Duration or generate 3.08% return on investment over 90 days.

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

Xtrackers Short Duration  vs.  JPMorgan Core Plus

Xtrackers Short Duration

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers Short Duration are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Xtrackers Short is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

JPMorgan Core Plus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Core Plus has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, JPMorgan Core is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Xtrackers Short and JPMorgan Core

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

The idea behind Xtrackers Short Duration and JPMorgan Core Plus 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.