Correlation Between JPM USD and SPDR Emerging

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

Diversification Opportunities for JPM USD and SPDR Emerging

0.0
  Correlation Coefficient
JPM USD Emrg
SPDR Emerging Markets

Pay attention - limited upside

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

Pair Corralation between JPM USD and SPDR Emerging

If you would invest (100.00)  in SPDR Emerging Markets on October 30, 2021 and sell it today you would earn a total of  100.00  from holding SPDR Emerging Markets or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

JPM USD Emrg  vs.  SPDR Emerging Markets

 Performance (%) 
      Timeline 
JPM USD Emrg 
JPM USD Performance
0 of 100
Over the last 90 days JPM USD Emrg has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, JPM USD is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

JPM USD Price Channel

SPDR Emerging Markets 
SPDR Emerging Performance
0 of 100
Over the last 90 days SPDR Emerging Markets has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, SPDR Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

JPM USD and SPDR Emerging Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with JPM USD and SPDR Emerging

The main advantage of trading using opposite JPM USD and SPDR Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPM USD position performs unexpectedly, SPDR Emerging 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 SPDR Emerging will offset losses from the drop in SPDR Emerging's long position.

JPM USD Emrg

Pair trading matchups for JPM USD

The idea behind JPM USD Emrg and SPDR Emerging Markets 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.

SPDR Emerging Markets

Pair trading matchups for SPDR Emerging

Du Pont vs. SPDR Emerging
Ford vs. SPDR Emerging
Vmware vs. SPDR Emerging
GM vs. SPDR Emerging
Salesforce vs. SPDR Emerging
Visa vs. SPDR Emerging
USA Quality vs. SPDR Emerging
Sentinelone Inc vs. SPDR Emerging
Twitter vs. SPDR Emerging
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against SPDR Emerging as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. SPDR Emerging's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, SPDR Emerging's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to SPDR Emerging Markets.
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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