Correlation Between JPMorgan and IShares Preferred
Can any of the company-specific risk be diversified away by investing in both JPMorgan and IShares Preferred 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 IShares Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan and iShares Preferred and, you can compare the effects of market volatilities on JPMorgan and IShares Preferred 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 IShares Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan and IShares Preferred.
Diversification Opportunities for JPMorgan and IShares Preferred
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between JPMorgan and IShares is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan and iShares Preferred and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Preferred 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 IShares Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Preferred has no effect on the direction of JPMorgan i.e., JPMorgan and IShares Preferred go up and down completely randomly.
Pair Corralation between JPMorgan and IShares Preferred
Considering the 90-day investment horizon JPMorgan is expected to generate 1.5 times more return on investment than IShares Preferred. However, JPMorgan is 1.5 times more volatile than iShares Preferred and. It trades about 0.09 of its potential returns per unit of risk. iShares Preferred and is currently generating about 0.05 per unit of risk. If you would invest 2,100 in JPMorgan on September 3, 2024 and sell it today you would earn a total of 299.00 from holding JPMorgan or generate 14.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 30.91% |
| Values | Daily Returns |
JPMorgan vs. iShares Preferred and
Performance |
| Timeline |
| JPMorgan |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iShares Preferred |
JPMorgan and IShares Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan and IShares Preferred
The main advantage of trading using opposite JPMorgan and IShares Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan position performs unexpectedly, IShares Preferred 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 Preferred will offset losses from the drop in IShares Preferred's long position.| JPMorgan vs. Alerian MLP ETF | JPMorgan vs. WisdomTree Emerging Markets | JPMorgan vs. Global X MLP | JPMorgan vs. First Trust North |
| IShares Preferred vs. Invesco Preferred ETF | IShares Preferred vs. iShares iBoxx High | IShares Preferred vs. Invesco Financial Preferred | IShares Preferred vs. SPDR Bloomberg High |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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