Correlation Between Jpmorgan Floating and Ishares Municipal
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Floating 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 Floating 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 Floating Rate and Ishares Municipal Bond, you can compare the effects of market volatilities on Jpmorgan Floating 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 Floating with a short position of Ishares Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Floating and Ishares Municipal.
Diversification Opportunities for Jpmorgan Floating and Ishares Municipal
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jpmorgan and Ishares is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Floating Rate 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 Floating 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 Floating Rate 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 Floating i.e., Jpmorgan Floating and Ishares Municipal go up and down completely randomly.
Pair Corralation between Jpmorgan Floating and Ishares Municipal
Assuming the 90 days horizon Jpmorgan Floating is expected to generate 1.04 times less return on investment than Ishares Municipal. But when comparing it to its historical volatility, Jpmorgan Floating Rate is 3.37 times less risky than Ishares Municipal. It trades about 0.36 of its potential returns per unit of risk. Ishares Municipal Bond is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Ishares Municipal Bond on August 26, 2024 and sell it today you would earn a total of 8.00 from holding Ishares Municipal Bond or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Floating Rate vs. Ishares Municipal Bond
Performance |
| Timeline |
| Jpmorgan Floating Rate |
| Ishares Municipal Bond |
Jpmorgan Floating and Ishares Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Floating and Ishares Municipal
The main advantage of trading using opposite Jpmorgan Floating and Ishares Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Floating 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.| Jpmorgan Floating vs. Ishares Municipal Bond | Jpmorgan Floating vs. Nuveen Minnesota Municipal | Jpmorgan Floating vs. California Bond Fund | Jpmorgan Floating vs. Versatile Bond Portfolio |
| Ishares Municipal vs. Franklin High Yield | Ishares Municipal vs. Transamerica Intermediate Muni | Ishares Municipal vs. Pace Municipal Fixed | Ishares Municipal vs. Nuveen All American Municipal |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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