Correlation Between JPMorgan Municipal and Vanguard Intermediate
Can any of the company-specific risk be diversified away by investing in both JPMorgan Municipal and Vanguard Intermediate 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 Municipal and Vanguard Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Municipal and Vanguard Intermediate Term Tax Exempt, you can compare the effects of market volatilities on JPMorgan Municipal and Vanguard Intermediate 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 Municipal with a short position of Vanguard Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Municipal and Vanguard Intermediate.
Diversification Opportunities for JPMorgan Municipal and Vanguard Intermediate
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between JPMorgan and Vanguard is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Municipal and Vanguard Intermediate Term Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Intermediate and JPMorgan Municipal 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 Municipal are associated (or correlated) with Vanguard Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Intermediate has no effect on the direction of JPMorgan Municipal i.e., JPMorgan Municipal and Vanguard Intermediate go up and down completely randomly.
Pair Corralation between JPMorgan Municipal and Vanguard Intermediate
Given the investment horizon of 90 days JPMorgan Municipal is expected to generate 1.25 times more return on investment than Vanguard Intermediate. However, JPMorgan Municipal is 1.25 times more volatile than Vanguard Intermediate Term Tax Exempt. It trades about 0.06 of its potential returns per unit of risk. Vanguard Intermediate Term Tax Exempt is currently generating about 0.05 per unit of risk. If you would invest 4,804 in JPMorgan Municipal on August 26, 2024 and sell it today you would earn a total of 253.00 from holding JPMorgan Municipal or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 53.05% |
| Values | Daily Returns |
JPMorgan Municipal vs. Vanguard Intermediate Term Tax
Performance |
| Timeline |
| JPMorgan Municipal |
| Vanguard Intermediate |
JPMorgan Municipal and Vanguard Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Municipal and Vanguard Intermediate
The main advantage of trading using opposite JPMorgan Municipal and Vanguard Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Municipal position performs unexpectedly, Vanguard Intermediate 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 Vanguard Intermediate will offset losses from the drop in Vanguard Intermediate's long position.| JPMorgan Municipal vs. BlackRock Intermediate Muni | JPMorgan Municipal vs. SSGA Active Trust | JPMorgan Municipal vs. SPDR MarketAxess Investment | JPMorgan Municipal vs. SSGA Active Trust |
| Vanguard Intermediate vs. SSGA Active Trust | Vanguard Intermediate vs. SPDR Nuveen Municipal | Vanguard Intermediate vs. Xtrackers California Municipal | Vanguard Intermediate vs. iShares Short Maturity |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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