Correlation Between JPMorgan BetaBuilders and DBX ETF

Can any of the company-specific risk be diversified away by investing in both JPMorgan BetaBuilders and DBX ETF 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 DBX ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JPMorgan BetaBuilders Mid and DBX ETF Trust, you can compare the effects of market volatilities on JPMorgan BetaBuilders and DBX ETF 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 DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan BetaBuilders and DBX ETF.

Diversification Opportunities for JPMorgan BetaBuilders and DBX ETF

0.99

Correlation Coefficient

JPMorgan BetaBuilders  DBX ETF

No risk reduction

The 3 months correlation between JPMorgan and DBX is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan BetaBuilders Mid and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust 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 Mid are associated (or correlated) with DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of JPMorgan BetaBuilders i.e., JPMorgan BetaBuilders and DBX ETF go up and down completely randomly.

Pair Corralation between JPMorgan BetaBuilders and DBX ETF

Given the investment horizon of 90 days JPMorgan BetaBuilders Mid is expected to generate 1.03 times more return on investment than DBX ETF. However, JPMorgan BetaBuilders is 1.03 times more volatile than DBX ETF Trust. It trades about 0.07 of its potential returns per unit of risk. DBX ETF Trust is currently generating about 0.07 per unit of risk. If you would invest  7,263  in JPMorgan BetaBuilders Mid on June 16, 2024 and sell it today you would earn a total of  1,903  from holding JPMorgan BetaBuilders Mid or generate 26.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

JPMorgan BetaBuilders Mid  vs.  DBX ETF Trust

JPMorgan BetaBuilders Mid

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan BetaBuilders Mid are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, JPMorgan BetaBuilders is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

DBX ETF Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DBX ETF Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, DBX ETF is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JPMorgan BetaBuilders and DBX ETF

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

The idea behind JPMorgan BetaBuilders Mid and DBX ETF Trust 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.