Correlation Between IShares Trust and JPMorgan Equity
Can any of the company-specific risk be diversified away by investing in both IShares Trust and JPMorgan Equity 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 Trust and JPMorgan Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and JPMorgan Equity Focus, you can compare the effects of market volatilities on IShares Trust and JPMorgan Equity 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 Trust with a short position of JPMorgan Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and JPMorgan Equity.
Diversification Opportunities for IShares Trust and JPMorgan Equity
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and JPMorgan is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and JPMorgan Equity Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Equity Focus and IShares Trust 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 Trust are associated (or correlated) with JPMorgan Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Equity Focus has no effect on the direction of IShares Trust i.e., IShares Trust and JPMorgan Equity go up and down completely randomly.
Pair Corralation between IShares Trust and JPMorgan Equity
Given the investment horizon of 90 days iShares Trust is expected to generate 1.26 times more return on investment than JPMorgan Equity. However, IShares Trust is 1.26 times more volatile than JPMorgan Equity Focus. It trades about 0.33 of its potential returns per unit of risk. JPMorgan Equity Focus is currently generating about 0.38 per unit of risk. If you would invest 4,128 in iShares Trust on September 1, 2024 and sell it today you would earn a total of 280.00 from holding iShares Trust or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Trust vs. JPMorgan Equity Focus
Performance |
| Timeline |
| iShares Trust |
| JPMorgan Equity Focus |
IShares Trust and JPMorgan Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and JPMorgan Equity
The main advantage of trading using opposite IShares Trust and JPMorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, JPMorgan Equity 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 Equity will offset losses from the drop in JPMorgan Equity's long position.| IShares Trust vs. Vanguard Growth Index | IShares Trust vs. iShares Russell 1000 | IShares Trust vs. iShares SP 500 | IShares Trust vs. iShares Core SP |
| JPMorgan Equity vs. Invesco Actively Managed | JPMorgan Equity vs. iShares Trust | JPMorgan Equity vs. Xtrackers MSCI Emerging | JPMorgan Equity vs. iShares MSCI Emerging |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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