Correlation Between ProShares Trust and JPMorgan Global

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

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

Diversification Opportunities for ProShares Trust and JPMorgan Global

-0.56

Correlation Coefficient

ProShares Trust  JPMorgan Global

Excellent diversification

The 3 months correlation between ProShares and JPMorgan is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and JPMorgan Global Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Global Select and ProShares Trust 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 ProShares Trust are associated (or correlated) with JPMorgan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Global Select has no effect on the direction of ProShares Trust i.e., ProShares Trust and JPMorgan Global go up and down completely randomly.

Pair Corralation between ProShares Trust and JPMorgan Global

Given the investment horizon of 90 days ProShares Trust is expected to under-perform the JPMorgan Global. In addition to that, ProShares Trust is 4.62 times more volatile than JPMorgan Global Select. It trades about -0.23 of its total potential returns per unit of risk. JPMorgan Global Select is currently generating about 0.05 per unit of volatility. If you would invest  6,172  in JPMorgan Global Select on August 30, 2024 and sell it today you would earn a total of  142.00  from holding JPMorgan Global Select or generate 2.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

ProShares Trust   vs.  JPMorgan Global Select

ProShares Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the Etf traders.

JPMorgan Global Select

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Global Select are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, JPMorgan Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ProShares Trust and JPMorgan Global

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

The idea behind ProShares Trust and JPMorgan Global Select 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.