Correlation Between JPMorgan Emerging and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both JPMorgan Emerging and IShares MSCI 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 Emerging and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Emerging Markets and iShares MSCI USA, you can compare the effects of market volatilities on JPMorgan Emerging and IShares MSCI 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 Emerging with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Emerging and IShares MSCI.
Diversification Opportunities for JPMorgan Emerging and IShares MSCI
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JPMorgan and IShares is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Emerging Markets and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA and JPMorgan Emerging 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 Emerging Markets are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI USA has no effect on the direction of JPMorgan Emerging i.e., JPMorgan Emerging and IShares MSCI go up and down completely randomly.
Pair Corralation between JPMorgan Emerging and IShares MSCI
Given the investment horizon of 90 days JPMorgan Emerging is expected to generate 3.69 times less return on investment than IShares MSCI. In addition to that, JPMorgan Emerging is 1.35 times more volatile than iShares MSCI USA. It trades about 0.03 of its total potential returns per unit of risk. iShares MSCI USA is currently generating about 0.14 per unit of volatility. If you would invest 10,849 in iShares MSCI USA on September 1, 2024 and sell it today you would earn a total of 1,711 from holding iShares MSCI USA or generate 15.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
JPMorgan Emerging Markets vs. iShares MSCI USA
Performance |
| Timeline |
| JPMorgan Emerging Markets |
| iShares MSCI USA |
JPMorgan Emerging and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Emerging and IShares MSCI
The main advantage of trading using opposite JPMorgan Emerging and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Emerging position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| JPMorgan Emerging vs. JPMorgan BetaBuilders International | JPMorgan Emerging vs. JPMorgan Core Plus | JPMorgan Emerging vs. JPMorgan BetaBuilders Equity | JPMorgan Emerging vs. JPMorgan BetaBuilders Canada |
| IShares MSCI vs. iShares MSCI KLD | IShares MSCI vs. iShares ESG Aware | IShares MSCI vs. iShares MSCI ACWI | IShares MSCI vs. SPDR SSGA Gender |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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