Correlation Between T Rex and JPMorgan International

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

By analyzing existing cross correlation between T Rex 2X Long and JPMorgan International Bond, you can compare the effects of market volatilities on T Rex and JPMorgan International 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 T Rex with a short position of JPMorgan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and JPMorgan International.

Diversification Opportunities for T Rex and JPMorgan International

-0.63

Correlation Coefficient

T Rex  JPMorgan International

Excellent diversification

The 3 months correlation between NVDX and JPMorgan is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and JPMorgan International Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan International and T Rex 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 T Rex 2X Long are associated (or correlated) with JPMorgan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan International has no effect on the direction of T Rex i.e., T Rex and JPMorgan International go up and down completely randomly.

Pair Corralation between T Rex and JPMorgan International

Given the investment horizon of 90 days T Rex 2X Long is expected to generate 26.33 times more return on investment than JPMorgan International. However, T Rex is 26.33 times more volatile than JPMorgan International Bond. It trades about 0.08 of its potential returns per unit of risk. JPMorgan International Bond is currently generating about 0.06 per unit of risk. If you would invest  1,379  in T Rex 2X Long on September 12, 2024 and sell it today you would earn a total of  267.00  from holding T Rex 2X Long or generate 19.36% return on investment over 90 days.

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

T Rex 2X Long  vs.  JPMorgan International Bond

T Rex 2X

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Rex 2X Long are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, T Rex showed solid returns over the last few months and may actually be approaching a breakup point.

JPMorgan International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan International Bond are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, JPMorgan International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with T Rex and JPMorgan International

The main advantage of trading using opposite T Rex and JPMorgan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex position performs unexpectedly, JPMorgan International 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 International will offset losses from the drop in JPMorgan International's long position.

The idea behind T Rex 2X Long and JPMorgan International Bond 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.