Correlation Between IShares ETF and JPMorgan Inflation
Can any of the company-specific risk be diversified away by investing in both IShares ETF and JPMorgan Inflation 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 IShares ETF and JPMorgan Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares ETF Trust and JPMorgan Inflation Managed, you can compare the effects of market volatilities on IShares ETF and JPMorgan Inflation 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 IShares ETF with a short position of JPMorgan Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ETF and JPMorgan Inflation.
Diversification Opportunities for IShares ETF and JPMorgan Inflation
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and JPMorgan is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares ETF Trust and JPMorgan Inflation Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Inflation and IShares ETF 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 iShares ETF Trust are associated (or correlated) with JPMorgan Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Inflation has no effect on the direction of IShares ETF i.e., IShares ETF and JPMorgan Inflation go up and down completely randomly.
Pair Corralation between IShares ETF and JPMorgan Inflation
Given the investment horizon of 90 days IShares ETF is expected to generate 1.2 times less return on investment than JPMorgan Inflation. In addition to that, IShares ETF is 1.34 times more volatile than JPMorgan Inflation Managed. It trades about 0.04 of its total potential returns per unit of risk. JPMorgan Inflation Managed is currently generating about 0.07 per unit of volatility. If you would invest 4,351 in JPMorgan Inflation Managed on September 3, 2024 and sell it today you would earn a total of 385.00 from holding JPMorgan Inflation Managed or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ETF Trust vs. JPMorgan Inflation Managed
Performance |
| Timeline |
| iShares ETF Trust |
| JPMorgan Inflation |
IShares ETF and JPMorgan Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ETF and JPMorgan Inflation
The main advantage of trading using opposite IShares ETF and JPMorgan Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ETF position performs unexpectedly, JPMorgan Inflation 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 Inflation will offset losses from the drop in JPMorgan Inflation's long position.| IShares ETF vs. iShares TIPS Bond | IShares ETF vs. Quadratic Interest Rate | IShares ETF vs. JPMorgan Inflation Managed | IShares ETF vs. FlexShares iBoxx 5 Year |
| JPMorgan Inflation vs. Dimensional ETF Trust | JPMorgan Inflation vs. JPMorgan Short Duration | JPMorgan Inflation vs. Goldman Sachs Access | JPMorgan Inflation vs. SPDR Bloomberg 1 10 |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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