Correlation Between JPMorgan and Virtus LifeSci

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

By analyzing existing cross correlation between JPMorgan and Virtus LifeSci Biotech, you can compare the effects of market volatilities on JPMorgan and Virtus LifeSci 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 with a short position of Virtus LifeSci. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan and Virtus LifeSci.

Diversification Opportunities for JPMorgan and Virtus LifeSci

-0.9

Correlation Coefficient

JPMorgan  Virtus LifeSci

Pay attention - limited upside

The 3 months correlation between JPMorgan and Virtus is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan and Virtus LifeSci Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus LifeSci Biotech and JPMorgan 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 are associated (or correlated) with Virtus LifeSci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus LifeSci Biotech has no effect on the direction of JPMorgan i.e., JPMorgan and Virtus LifeSci go up and down completely randomly.

Pair Corralation between JPMorgan and Virtus LifeSci

If you would invest  5,196  in JPMorgan on February 1, 2024 and sell it today you would earn a total of  0.00  from holding JPMorgan or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.55%
Values	Daily Returns

JPMorgan  vs.  Virtus LifeSci Biotech

JPMorgan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JPMorgan is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Virtus LifeSci Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus LifeSci Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Etf's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with JPMorgan and Virtus LifeSci

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

The idea behind JPMorgan and Virtus LifeSci Biotech 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.