Correlation Between JPMorgan BetaBuilders and IShares Currency

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Can any of the company-specific risk be diversified away by investing in both JPMorgan BetaBuilders and IShares Currency 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 BetaBuilders and IShares Currency into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan BetaBuilders Europe and IShares Currency Hedged, you can compare the effects of market volatilities on JPMorgan BetaBuilders and IShares Currency 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 BetaBuilders with a short position of IShares Currency. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan BetaBuilders and IShares Currency.

Diversification Opportunities for JPMorgan BetaBuilders and IShares Currency

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between JPMorgan and IShares is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan BetaBuilders Europe and IShares Currency Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares Currency Hedged and JPMorgan BetaBuilders 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 BetaBuilders Europe are associated (or correlated) with IShares Currency. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares Currency Hedged has no effect on the direction of JPMorgan BetaBuilders i.e., JPMorgan BetaBuilders and IShares Currency go up and down completely randomly.

Pair Corralation between JPMorgan BetaBuilders and IShares Currency

Given the investment horizon of 90 days JPMorgan BetaBuilders is expected to generate 1.65 times less return on investment than IShares Currency. In addition to that, JPMorgan BetaBuilders is 1.17 times more volatile than IShares Currency Hedged. It trades about 0.04 of its total potential returns per unit of risk. IShares Currency Hedged is currently generating about 0.07 per unit of volatility. If you would invest  2,682  in IShares Currency Hedged on December 30, 2023 and sell it today you would earn a total of  995.00  from holding IShares Currency Hedged or generate 37.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

JPMorgan BetaBuilders Europe  vs.  IShares Currency Hedged

 Performance 
       Timeline  
JPMorgan BetaBuilders 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan BetaBuilders Europe are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, JPMorgan BetaBuilders may actually be approaching a critical reversion point that can send shares even higher in April 2024.
IShares Currency Hedged 

Risk-Adjusted Performance

22 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in IShares Currency Hedged are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, IShares Currency may actually be approaching a critical reversion point that can send shares even higher in April 2024.

JPMorgan BetaBuilders and IShares Currency Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JPMorgan BetaBuilders and IShares Currency

The main advantage of trading using opposite JPMorgan BetaBuilders and IShares Currency positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan BetaBuilders position performs unexpectedly, IShares Currency 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 IShares Currency will offset losses from the drop in IShares Currency's long position.
The idea behind JPMorgan BetaBuilders Europe and IShares Currency Hedged 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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