Correlation Between Ishares Municipal and Jpmorgan International
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal and Jpmorgan International 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 Municipal and Jpmorgan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ishares Municipal Bond and Jpmorgan International Value, you can compare the effects of market volatilities on Ishares Municipal and Jpmorgan International 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 Municipal with a short position of Jpmorgan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and Jpmorgan International.
Diversification Opportunities for Ishares Municipal and Jpmorgan International
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ishares and Jpmorgan is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and Jpmorgan International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan International and Ishares Municipal 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 Municipal Bond are associated (or correlated) with Jpmorgan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan International has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and Jpmorgan International go up and down completely randomly.
Pair Corralation between Ishares Municipal and Jpmorgan International
Assuming the 90 days horizon Ishares Municipal is expected to generate 3.9 times less return on investment than Jpmorgan International. But when comparing it to its historical volatility, Ishares Municipal Bond is 3.83 times less risky than Jpmorgan International. It trades about 0.07 of its potential returns per unit of risk. Jpmorgan International Value is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,299 in Jpmorgan International Value on August 26, 2024 and sell it today you would earn a total of 186.00 from holding Jpmorgan International Value or generate 14.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ishares Municipal Bond vs. Jpmorgan International Value
Performance |
| Timeline |
| Ishares Municipal Bond |
| Jpmorgan International |
Ishares Municipal and Jpmorgan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and Jpmorgan International
The main advantage of trading using opposite Ishares Municipal and Jpmorgan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal position performs unexpectedly, Jpmorgan International 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 International will offset losses from the drop in Jpmorgan International's long position.| Ishares Municipal vs. Victory Integrity Small Cap | Ishares Municipal vs. Touchstone Small Cap | Ishares Municipal vs. Massmutual Select Small | Ishares Municipal vs. Champlain Small |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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