Correlation Between JP Morgan and BlackRock Intermediate
Can any of the company-specific risk be diversified away by investing in both JP Morgan and BlackRock 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 JP Morgan and BlackRock Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JP Morgan Exchange Traded and BlackRock Intermediate Muni, you can compare the effects of market volatilities on JP Morgan and BlackRock 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 JP Morgan with a short position of BlackRock Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of JP Morgan and BlackRock Intermediate.
Diversification Opportunities for JP Morgan and BlackRock Intermediate
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JPIE and BlackRock is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Exchange Traded and BlackRock Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Intermediate and JP Morgan 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 JP Morgan Exchange Traded are associated (or correlated) with BlackRock Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Intermediate has no effect on the direction of JP Morgan i.e., JP Morgan and BlackRock Intermediate go up and down completely randomly.
Pair Corralation between JP Morgan and BlackRock Intermediate
Given the investment horizon of 90 days JP Morgan is expected to generate 1.44 times less return on investment than BlackRock Intermediate. But when comparing it to its historical volatility, JP Morgan Exchange Traded is 3.17 times less risky than BlackRock Intermediate. It trades about 0.32 of its potential returns per unit of risk. BlackRock Intermediate Muni is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,375 in BlackRock Intermediate Muni on September 1, 2024 and sell it today you would earn a total of 23.00 from holding BlackRock Intermediate Muni or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JP Morgan Exchange Traded vs. BlackRock Intermediate Muni
Performance |
| Timeline |
| JP Morgan Exchange |
| BlackRock Intermediate |
JP Morgan and BlackRock Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JP Morgan and BlackRock Intermediate
The main advantage of trading using opposite JP Morgan and BlackRock Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JP Morgan position performs unexpectedly, BlackRock 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 BlackRock Intermediate will offset losses from the drop in BlackRock Intermediate's long position.| JP Morgan vs. JPMorgan Core Plus | JP Morgan vs. JPMorgan International Bond | JP Morgan vs. JPMorgan Ultra Short Income | JP Morgan vs. JPMorgan Short Duration |
| BlackRock Intermediate vs. iShares JP Morgan | BlackRock Intermediate vs. iShares iBoxx Investment | BlackRock Intermediate vs. SPDR Nuveen Bloomberg | BlackRock Intermediate vs. iShares MBS ETF |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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