Correlation Between JPMorgan Equity and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both JPMorgan Equity 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 Equity 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 Equity Premium and iShares MSCI Emerging, you can compare the effects of market volatilities on JPMorgan Equity 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 Equity with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Equity and IShares MSCI.
Diversification Opportunities for JPMorgan Equity and IShares MSCI
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMorgan and IShares is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Equity Premium and iShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Emerging and JPMorgan Equity 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 Equity Premium 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 Emerging has no effect on the direction of JPMorgan Equity i.e., JPMorgan Equity and IShares MSCI go up and down completely randomly.
Pair Corralation between JPMorgan Equity and IShares MSCI
Assuming the 90 days trading horizon JPMorgan Equity Premium is expected to generate 0.99 times more return on investment than IShares MSCI. However, JPMorgan Equity Premium is 1.01 times less risky than IShares MSCI. It trades about 0.03 of its potential returns per unit of risk. iShares MSCI Emerging is currently generating about -0.28 per unit of risk. If you would invest 5,381 in JPMorgan Equity Premium on August 30, 2024 and sell it today you would earn a total of 18.00 from holding JPMorgan Equity Premium or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Equity Premium vs. iShares MSCI Emerging
Performance |
| Timeline |
| JPMorgan Equity Premium |
| iShares MSCI Emerging |
JPMorgan Equity and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Equity and IShares MSCI
The main advantage of trading using opposite JPMorgan Equity and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Equity 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 Equity vs. Betashares Asia Technology | JPMorgan Equity vs. CD Private Equity | JPMorgan Equity vs. BetaShares Australia 200 | JPMorgan Equity vs. Australian High Interest |
| IShares MSCI vs. Betashares Asia Technology | IShares MSCI vs. CD Private Equity | IShares MSCI vs. BetaShares Australia 200 | IShares MSCI vs. Australian High Interest |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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