Correlation Between VanEck Vectors and JPMorgan Fundamental

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

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

Diversification Opportunities for VanEck Vectors and JPMorgan Fundamental

-0.16

Correlation Coefficient

VanEck Vectors  JPMorgan Fundamental

Good diversification

The 3 months correlation between VanEck and JPMorgan is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF and JPMorgan Fundamental Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Fundamental Data and VanEck Vectors 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 VanEck Vectors ETF are associated (or correlated) with JPMorgan Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Fundamental Data has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and JPMorgan Fundamental go up and down completely randomly.

Pair Corralation between VanEck Vectors and JPMorgan Fundamental

Considering the 90-day investment horizon VanEck Vectors is expected to generate 16.27 times less return on investment than JPMorgan Fundamental. But when comparing it to its historical volatility, VanEck Vectors ETF is 2.55 times less risky than JPMorgan Fundamental. It trades about 0.04 of its potential returns per unit of risk. JPMorgan Fundamental Data is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  5,300  in JPMorgan Fundamental Data on September 5, 2024 and sell it today you would earn a total of  682.00  from holding JPMorgan Fundamental Data or generate 12.87% return on investment over 90 days.

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

VanEck Vectors ETF  vs.  JPMorgan Fundamental Data

VanEck Vectors ETF

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Vectors ETF are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong primary indicators, VanEck Vectors is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

JPMorgan Fundamental Data

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Fundamental Data are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, JPMorgan Fundamental may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VanEck Vectors and JPMorgan Fundamental

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

The idea behind VanEck Vectors ETF and JPMorgan Fundamental Data 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.