Correlation Between IShares Trust and JPMorgan Healthcare
Can any of the company-specific risk be diversified away by investing in both IShares Trust and JPMorgan Healthcare 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 Healthcare 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 Healthcare Leaders, you can compare the effects of market volatilities on IShares Trust and JPMorgan Healthcare 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 Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and JPMorgan Healthcare.
Diversification Opportunities for IShares Trust and JPMorgan Healthcare
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and JPMorgan is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and JPMorgan Healthcare Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Healthcare 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 Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Healthcare has no effect on the direction of IShares Trust i.e., IShares Trust and JPMorgan Healthcare go up and down completely randomly.
Pair Corralation between IShares Trust and JPMorgan Healthcare
Given the investment horizon of 90 days iShares Trust is expected to generate 0.81 times more return on investment than JPMorgan Healthcare. However, iShares Trust is 1.23 times less risky than JPMorgan Healthcare. It trades about 0.11 of its potential returns per unit of risk. JPMorgan Healthcare Leaders is currently generating about 0.02 per unit of risk. If you would invest 2,758 in iShares Trust on August 29, 2024 and sell it today you would earn a total of 412.00 from holding iShares Trust or generate 14.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Trust vs. JPMorgan Healthcare Leaders
Performance |
| Timeline |
| iShares Trust |
| JPMorgan Healthcare |
IShares Trust and JPMorgan Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and JPMorgan Healthcare
The main advantage of trading using opposite IShares Trust and JPMorgan Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, JPMorgan Healthcare 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 Healthcare will offset losses from the drop in JPMorgan Healthcare's long position.| IShares Trust vs. First Trust Multi Asset | IShares Trust vs. Collaborative Investment Series | IShares Trust vs. Akros Monthly Payout | IShares Trust vs. Northern Lights |
| JPMorgan Healthcare vs. First Trust Exchange Traded | JPMorgan Healthcare vs. Ultimus Managers Trust | JPMorgan Healthcare vs. Horizon Kinetics Medical | JPMorgan Healthcare vs. Harbor Health Care |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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