Correlation Between T Rex and JPMorgan Short

Can any of the company-specific risk be diversified away by investing in both T Rex and JPMorgan Short 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 Short 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 Short Duration, you can compare the effects of market volatilities on T Rex and JPMorgan Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and JPMorgan Short.

Diversification Opportunities for T Rex and JPMorgan Short

-0.72

Correlation Coefficient

T Rex  JPMorgan Short

Pay attention - limited upside

The 3 months correlation between NVDX and JPMorgan is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and JPMorgan Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Short Duration 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Short Duration has no effect on the direction of T Rex i.e., T Rex and JPMorgan Short go up and down completely randomly.

Pair Corralation between T Rex and JPMorgan Short

Given the investment horizon of 90 days T Rex 2X Long is expected to under-perform the JPMorgan Short. In addition to that, T Rex is 40.37 times more volatile than JPMorgan Short Duration. It trades about -0.07 of its total potential returns per unit of risk. JPMorgan Short Duration is currently generating about -0.03 per unit of volatility. If you would invest  4,670  in JPMorgan Short Duration on September 26, 2024 and sell it today you would lose (4.00) from holding JPMorgan Short Duration or give up 0.09% of portfolio value 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 Short Duration

T Rex 2X

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in T Rex 2X Long are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental indicators, T Rex may actually be approaching a critical reversion point that can send shares even higher in January 2025.

JPMorgan Short Duration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Short Duration has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, JPMorgan Short is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with T Rex and JPMorgan Short

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

The idea behind T Rex 2X Long and JPMorgan Short Duration 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.