Correlation Between JPMorgan Climate and ProShares

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

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

Diversification Opportunities for JPMorgan Climate and ProShares

0.67

Correlation Coefficient

JPMorgan Climate  ProShares

Poor diversification

The 3 months correlation between JPMorgan and ProShares is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Climate Change and ProShares SP Kensho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP Kensho and JPMorgan Climate 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 Climate Change are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP Kensho has no effect on the direction of JPMorgan Climate i.e., JPMorgan Climate and ProShares go up and down completely randomly.

Pair Corralation between JPMorgan Climate and ProShares

Given the investment horizon of 90 days JPMorgan Climate Change is expected to generate 0.45 times more return on investment than ProShares. However, JPMorgan Climate Change is 2.25 times less risky than ProShares. It trades about -0.03 of its potential returns per unit of risk. ProShares SP Kensho is currently generating about -0.13 per unit of risk. If you would invest  4,375  in JPMorgan Climate Change on December 29, 2024 and sell it today you would lose (102.00) from holding JPMorgan Climate Change or give up 2.33% of portfolio value over 90 days.

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

JPMorgan Climate Change  vs.  ProShares SP Kensho

JPMorgan Climate Change

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan Climate Change has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, JPMorgan Climate is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

ProShares SP Kensho

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares SP Kensho 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with JPMorgan Climate and ProShares

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

The idea behind JPMorgan Climate Change and ProShares SP Kensho 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.