Correlation Between Ishares Municipal and Jpmorgan Floating
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal and Jpmorgan Floating 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 Floating 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 Floating Rate, you can compare the effects of market volatilities on Ishares Municipal and Jpmorgan Floating 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 Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and Jpmorgan Floating.
Diversification Opportunities for Ishares Municipal and Jpmorgan Floating
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ishares and Jpmorgan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and Jpmorgan Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Floating Rate 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 Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Floating Rate has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and Jpmorgan Floating go up and down completely randomly.
Pair Corralation between Ishares Municipal and Jpmorgan Floating
Assuming the 90 days horizon Ishares Municipal Bond is expected to under-perform the Jpmorgan Floating. In addition to that, Ishares Municipal is 3.56 times more volatile than Jpmorgan Floating Rate. It trades about -0.04 of its total potential returns per unit of risk. Jpmorgan Floating Rate is currently generating about 0.41 per unit of volatility. If you would invest 841.00 in Jpmorgan Floating Rate on August 25, 2024 and sell it today you would earn a total of 12.00 from holding Jpmorgan Floating Rate or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ishares Municipal Bond vs. Jpmorgan Floating Rate
Performance |
| Timeline |
| Ishares Municipal Bond |
| Jpmorgan Floating Rate |
Ishares Municipal and Jpmorgan Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and Jpmorgan Floating
The main advantage of trading using opposite Ishares Municipal and Jpmorgan Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal position performs unexpectedly, Jpmorgan Floating 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 Floating will offset losses from the drop in Jpmorgan Floating'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 |
| Jpmorgan Floating vs. T Rowe Price | Jpmorgan Floating vs. Pace Municipal Fixed | Jpmorgan Floating vs. Multisector Bond Sma | Jpmorgan Floating vs. Ishares Municipal Bond |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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