Correlation Between JPMorgan Diversified and Global X

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

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

Diversification Opportunities for JPMorgan Diversified and Global X

0.78

Correlation Coefficient

JPMorgan Diversified  Global X

Poor diversification

The 3 months correlation between JPMorgan and Global is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Diversified Return and Global X MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MSCI and JPMorgan Diversified 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 Diversified Return are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X MSCI has no effect on the direction of JPMorgan Diversified i.e., JPMorgan Diversified and Global X go up and down completely randomly.

Pair Corralation between JPMorgan Diversified and Global X

Given the investment horizon of 90 days JPMorgan Diversified Return is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, JPMorgan Diversified Return is 1.41 times less risky than Global X. The etf trades about -0.37 of its potential returns per unit of risk. The Global X MSCI is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,406  in Global X MSCI on September 30, 2024 and sell it today you would earn a total of  25.00  from holding Global X MSCI or generate 1.04% return on investment over 90 days.

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

JPMorgan Diversified Return  vs.  Global X MSCI

JPMorgan Diversified

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Diversified Return has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Global X MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with JPMorgan Diversified and Global X

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

The idea behind JPMorgan Diversified Return and Global X MSCI 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.