Correlation Between JPMorgan Core and JPMorgan Municipal
Can any of the company-specific risk be diversified away by investing in both JPMorgan Core and JPMorgan Municipal 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 JPMorgan Core and JPMorgan Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Core Plus and JPMorgan Municipal, you can compare the effects of market volatilities on JPMorgan Core and JPMorgan Municipal 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 JPMorgan Core with a short position of JPMorgan Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Core and JPMorgan Municipal.
Diversification Opportunities for JPMorgan Core and JPMorgan Municipal
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and JPMorgan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Core Plus and JPMorgan Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Municipal and JPMorgan Core 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 JPMorgan Core Plus are associated (or correlated) with JPMorgan Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Municipal has no effect on the direction of JPMorgan Core i.e., JPMorgan Core and JPMorgan Municipal go up and down completely randomly.
Pair Corralation between JPMorgan Core and JPMorgan Municipal
Given the investment horizon of 90 days JPMorgan Core Plus is expected to generate 1.13 times more return on investment than JPMorgan Municipal. However, JPMorgan Core is 1.13 times more volatile than JPMorgan Municipal. It trades about 0.11 of its potential returns per unit of risk. JPMorgan Municipal is currently generating about 0.12 per unit of risk. If you would invest 4,665 in JPMorgan Core Plus on September 4, 2024 and sell it today you would earn a total of 39.00 from holding JPMorgan Core Plus or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Core Plus vs. JPMorgan Municipal
Performance |
| Timeline |
| JPMorgan Core Plus |
| JPMorgan Municipal |
JPMorgan Core and JPMorgan Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Core and JPMorgan Municipal
The main advantage of trading using opposite JPMorgan Core and JPMorgan Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Core position performs unexpectedly, JPMorgan Municipal 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 Municipal will offset losses from the drop in JPMorgan Municipal's long position.| JPMorgan Core vs. JPMorgan BetaBuilders International | JPMorgan Core vs. JPMorgan BetaBuilders Equity | JPMorgan Core vs. JPMorgan Emerging Markets | JPMorgan Core vs. JPMorgan BetaBuilders Canada |
| JPMorgan Municipal vs. IQ MacKay Municipal | JPMorgan Municipal vs. Hartford Municipal Opportunities | JPMorgan Municipal vs. Columbia Multi Sector Municipal | JPMorgan Municipal vs. Franklin Liberty Federal |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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