Correlation Between Jpmorgan Smartretirement* and Ishares Municipal
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Smartretirement* and Ishares 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 Smartretirement* and Ishares Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Smartretirement Blend and Ishares Municipal Bond, you can compare the effects of market volatilities on Jpmorgan Smartretirement* and Ishares 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 Smartretirement* with a short position of Ishares Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement* and Ishares Municipal.
Diversification Opportunities for Jpmorgan Smartretirement* and Ishares Municipal
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jpmorgan and Ishares is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement Blend and Ishares Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Municipal Bond and Jpmorgan Smartretirement* 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 Smartretirement Blend are associated (or correlated) with Ishares Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Municipal Bond has no effect on the direction of Jpmorgan Smartretirement* i.e., Jpmorgan Smartretirement* and Ishares Municipal go up and down completely randomly.
Pair Corralation between Jpmorgan Smartretirement* and Ishares Municipal
Assuming the 90 days horizon Jpmorgan Smartretirement Blend is expected to generate 1.09 times more return on investment than Ishares Municipal. However, Jpmorgan Smartretirement* is 1.09 times more volatile than Ishares Municipal Bond. It trades about 0.32 of its potential returns per unit of risk. Ishares Municipal Bond is currently generating about 0.2 per unit of risk. If you would invest 1,916 in Jpmorgan Smartretirement Blend on September 1, 2024 and sell it today you would earn a total of 43.00 from holding Jpmorgan Smartretirement Blend or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Smartretirement Blend vs. Ishares Municipal Bond
Performance |
| Timeline |
| Jpmorgan Smartretirement* |
| Ishares Municipal Bond |
Jpmorgan Smartretirement* and Ishares Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Smartretirement* and Ishares Municipal
The main advantage of trading using opposite Jpmorgan Smartretirement* and Ishares Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Smartretirement* position performs unexpectedly, Ishares 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 Ishares Municipal will offset losses from the drop in Ishares Municipal's long position.The idea behind Jpmorgan Smartretirement Blend and Ishares Municipal Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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