Correlation Between JPMorgan Short and JPMorgan Municipal
Can any of the company-specific risk be diversified away by investing in both JPMorgan Short and JPMorgan 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 Short and JPMorgan Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Short Duration and JPMorgan Municipal, you can compare the effects of market volatilities on JPMorgan Short and JPMorgan 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 Short with a short position of JPMorgan Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Short and JPMorgan Municipal.
Diversification Opportunities for JPMorgan Short and JPMorgan Municipal
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and JPMorgan is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Short Duration and JPMorgan Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Municipal and JPMorgan Short 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 Short Duration are associated (or correlated) with JPMorgan Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Municipal has no effect on the direction of JPMorgan Short i.e., JPMorgan Short and JPMorgan Municipal go up and down completely randomly.
Pair Corralation between JPMorgan Short and JPMorgan Municipal
Given the investment horizon of 90 days JPMorgan Short is expected to generate 74.0 times less return on investment than JPMorgan Municipal. But when comparing it to its historical volatility, JPMorgan Short Duration is 1.61 times less risky than JPMorgan Municipal. It trades about 0.0 of its potential returns per unit of risk. JPMorgan Municipal is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,068 in JPMorgan Municipal on September 12, 2024 and sell it today you would earn a total of 23.00 from holding JPMorgan Municipal or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Short Duration vs. JPMorgan Municipal
Performance |
| Timeline |
| JPMorgan Short Duration |
| JPMorgan Municipal |
JPMorgan Short and JPMorgan Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Short and JPMorgan Municipal
The main advantage of trading using opposite JPMorgan Short and JPMorgan Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Short position performs unexpectedly, JPMorgan 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 JPMorgan Municipal will offset losses from the drop in JPMorgan Municipal's long position.| JPMorgan Short vs. JPMorgan Ultra Short Municipal | JPMorgan Short vs. JPMorgan International Bond | JPMorgan Short vs. JPMorgan Core Plus | JPMorgan Short vs. JPMorgan USD Emerging |
| JPMorgan Municipal vs. JPMorgan Ultra Short Municipal | JPMorgan Municipal vs. JPMorgan USD Emerging | JPMorgan Municipal vs. iShares Short Maturity | JPMorgan Municipal vs. IQ MacKay 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 CEOs Directory module to screen CEOs from public companies around the world.
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