Correlation Between Nasdaq-100(r) and Jpmorgan High

Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Jpmorgan High 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 Nasdaq-100(r) and Jpmorgan High into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Jpmorgan High Yield, you can compare the effects of market volatilities on Nasdaq-100(r) and Jpmorgan High 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 Nasdaq-100(r) with a short position of Jpmorgan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Jpmorgan High.

Diversification Opportunities for Nasdaq-100(r) and Jpmorgan High

0.0

Correlation Coefficient

Nasdaq-100(r)  Jpmorgan High

Pay attention - limited upside

The 3 months correlation between Nasdaq-100(r) and Jpmorgan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Jpmorgan High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan High Yield and Nasdaq-100(r) 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 Nasdaq 100 2x Strategy are associated (or correlated) with Jpmorgan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan High Yield has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Jpmorgan High go up and down completely randomly.

Pair Corralation between Nasdaq-100(r) and Jpmorgan High

If you would invest  37,809  in Nasdaq 100 2x Strategy on October 1, 2024 and sell it today you would earn a total of  2,663  from holding Nasdaq 100 2x Strategy or generate 7.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nasdaq 100 2x Strategy  vs.  Jpmorgan High Yield

Nasdaq 100 2x

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 2x Strategy are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Nasdaq-100(r) may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jpmorgan High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nasdaq-100(r) and Jpmorgan High

The main advantage of trading using opposite Nasdaq-100(r) and Jpmorgan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Jpmorgan High 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 High will offset losses from the drop in Jpmorgan High's long position.

The idea behind Nasdaq 100 2x Strategy and Jpmorgan High Yield 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.