Correlation Between SPDR DoubleLine and JPMorgan USD
Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine and JPMorgan USD 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 SPDR DoubleLine and JPMorgan USD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR DoubleLine Emerging and JPMorgan USD Emerging, you can compare the effects of market volatilities on SPDR DoubleLine and JPMorgan USD 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 SPDR DoubleLine with a short position of JPMorgan USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and JPMorgan USD.
Diversification Opportunities for SPDR DoubleLine and JPMorgan USD
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and JPMorgan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Emerging and JPMorgan USD Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan USD Emerging and SPDR DoubleLine 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 SPDR DoubleLine Emerging are associated (or correlated) with JPMorgan USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan USD Emerging has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and JPMorgan USD go up and down completely randomly.
Pair Corralation between SPDR DoubleLine and JPMorgan USD
Given the investment horizon of 90 days SPDR DoubleLine Emerging is expected to generate 0.52 times more return on investment than JPMorgan USD. However, SPDR DoubleLine Emerging is 1.91 times less risky than JPMorgan USD. It trades about 0.12 of its potential returns per unit of risk. JPMorgan USD Emerging is currently generating about 0.05 per unit of risk. If you would invest 3,675 in SPDR DoubleLine Emerging on August 26, 2024 and sell it today you would earn a total of 588.00 from holding SPDR DoubleLine Emerging or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR DoubleLine Emerging vs. JPMorgan USD Emerging
Performance |
| Timeline |
| SPDR DoubleLine Emerging |
| JPMorgan USD Emerging |
SPDR DoubleLine and JPMorgan USD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR DoubleLine and JPMorgan USD
The main advantage of trading using opposite SPDR DoubleLine and JPMorgan USD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR DoubleLine position performs unexpectedly, JPMorgan USD 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 USD will offset losses from the drop in JPMorgan USD's long position.| SPDR DoubleLine vs. iShares JP Morgan | SPDR DoubleLine vs. Invesco Emerging Markets | SPDR DoubleLine vs. iShares JP Morgan | SPDR DoubleLine vs. iShares JP Morgan |
| JPMorgan USD vs. iShares JP Morgan | JPMorgan USD vs. Invesco Emerging Markets | JPMorgan USD vs. iShares JP Morgan | JPMorgan USD vs. iShares JP Morgan |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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