Correlation Between ProShares UltraShort and JPMorgan Ultra
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and JPMorgan Ultra 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 ProShares UltraShort and JPMorgan Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort Utilities and JPMorgan Ultra Short Income, you can compare the effects of market volatilities on ProShares UltraShort and JPMorgan Ultra 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 ProShares UltraShort with a short position of JPMorgan Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and JPMorgan Ultra.
Diversification Opportunities for ProShares UltraShort and JPMorgan Ultra
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and JPMorgan is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Utilities and JPMorgan Ultra Short Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Ultra Short and ProShares UltraShort 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 ProShares UltraShort Utilities are associated (or correlated) with JPMorgan Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Ultra Short has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and JPMorgan Ultra go up and down completely randomly.
Pair Corralation between ProShares UltraShort and JPMorgan Ultra
Considering the 90-day investment horizon ProShares UltraShort Utilities is expected to under-perform the JPMorgan Ultra. In addition to that, ProShares UltraShort is 15.86 times more volatile than JPMorgan Ultra Short Income. It trades about -0.16 of its total potential returns per unit of risk. JPMorgan Ultra Short Income is currently generating about 0.12 per unit of volatility. If you would invest 5,020 in JPMorgan Ultra Short Income on January 25, 2024 and sell it today you would earn a total of 18.00 from holding JPMorgan Ultra Short Income or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ProShares UltraShort Utilities vs. JPMorgan Ultra Short Income
Performance |
| Timeline |
| ProShares UltraShort |
| JPMorgan Ultra Short |
ProShares UltraShort and JPMorgan Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and JPMorgan Ultra
The main advantage of trading using opposite ProShares UltraShort and JPMorgan Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, JPMorgan Ultra 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 Ultra will offset losses from the drop in JPMorgan Ultra's long position.The idea behind ProShares UltraShort Utilities and JPMorgan Ultra Short Income 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.| JPMorgan Ultra vs. iShares ESG 1 5 | JPMorgan Ultra vs. First Trust Low | JPMorgan Ultra vs. First Trust Managed | JPMorgan Ultra vs. First Trust Senior |
Check out your portfolio center.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.
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