Correlation Between JPMorgan USD and Virtus ETF

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

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

Diversification Opportunities for JPMorgan USD and Virtus ETF

-0.23

Correlation Coefficient

JPMorgan USD  Virtus ETF

Very good diversification

The 3 months correlation between JPMorgan and Virtus is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan USD Emerging and Virtus ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus ETF Trust and JPMorgan USD 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 USD Emerging are associated (or correlated) with Virtus ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus ETF Trust has no effect on the direction of JPMorgan USD i.e., JPMorgan USD and Virtus ETF go up and down completely randomly.

Pair Corralation between JPMorgan USD and Virtus ETF

Given the investment horizon of 90 days JPMorgan USD is expected to generate 10.39 times less return on investment than Virtus ETF. In addition to that, JPMorgan USD is 1.16 times more volatile than Virtus ETF Trust. It trades about 0.02 of its total potential returns per unit of risk. Virtus ETF Trust is currently generating about 0.22 per unit of volatility. If you would invest  2,649  in Virtus ETF Trust on September 3, 2024 and sell it today you would earn a total of  118.00  from holding Virtus ETF Trust or generate 4.45% return on investment over 90 days.

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

JPMorgan USD Emerging  vs.  Virtus ETF Trust

JPMorgan USD Emerging

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan USD Emerging are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, JPMorgan USD is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Virtus ETF Trust

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus ETF Trust are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Virtus ETF is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JPMorgan USD and Virtus ETF

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

The idea behind JPMorgan USD Emerging and Virtus ETF Trust 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.