Correlation Between SP 500 and JPM BetaBuilders

Can any of the company-specific risk be diversified away by investing in both SP 500 and JPM BetaBuilders 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 SP 500 and JPM BetaBuilders into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SP 500 VIX and JPM BetaBuilders Treasury, you can compare the effects of market volatilities on SP 500 and JPM BetaBuilders 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 SP 500 with a short position of JPM BetaBuilders. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP 500 and JPM BetaBuilders.

Diversification Opportunities for SP 500 and JPM BetaBuilders

-0.77

Correlation Coefficient

SP 500  JPM BetaBuilders

Pay attention - limited upside

The 3 months correlation between VILX and JPM is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SP 500 VIX and JPM BetaBuilders Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM BetaBuilders Treasury and SP 500 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 SP 500 VIX are associated (or correlated) with JPM BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM BetaBuilders Treasury has no effect on the direction of SP 500 i.e., SP 500 and JPM BetaBuilders go up and down completely randomly.

Pair Corralation between SP 500 and JPM BetaBuilders

Assuming the 90 days trading horizon SP 500 VIX is expected to under-perform the JPM BetaBuilders. In addition to that, SP 500 is 21.28 times more volatile than JPM BetaBuilders Treasury. It trades about 0.0 of its total potential returns per unit of risk. JPM BetaBuilders Treasury is currently generating about 0.2 per unit of volatility. If you would invest  8,720  in JPM BetaBuilders Treasury on October 9, 2024 and sell it today you would earn a total of  340.00  from holding JPM BetaBuilders Treasury or generate 3.9% return on investment over 90 days.

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

SP 500 VIX  vs.  JPM BetaBuilders Treasury

SP 500 VIX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SP 500 VIX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

JPM BetaBuilders Treasury

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPM BetaBuilders Treasury are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JPM BetaBuilders is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SP 500 and JPM BetaBuilders

The main advantage of trading using opposite SP 500 and JPM BetaBuilders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP 500 position performs unexpectedly, JPM BetaBuilders 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 JPM BetaBuilders will offset losses from the drop in JPM BetaBuilders' long position.

The idea behind SP 500 VIX and JPM BetaBuilders Treasury 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.