Correlation Between IShares IBoxx and JP Morgan
Can any of the company-specific risk be diversified away by investing in both IShares IBoxx and JP Morgan 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 IShares IBoxx and JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares iBoxx Investment and JP Morgan Exchange Traded, you can compare the effects of market volatilities on IShares IBoxx and JP Morgan 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 IShares IBoxx with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBoxx and JP Morgan.
Diversification Opportunities for IShares IBoxx and JP Morgan
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and BBSB is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBoxx Investment and JP Morgan Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Exchange and IShares IBoxx 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 iShares iBoxx Investment are associated (or correlated) with JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Exchange has no effect on the direction of IShares IBoxx i.e., IShares IBoxx and JP Morgan go up and down completely randomly.
Pair Corralation between IShares IBoxx and JP Morgan
Considering the 90-day investment horizon iShares iBoxx Investment is expected to generate 4.6 times more return on investment than JP Morgan. However, IShares IBoxx is 4.6 times more volatile than JP Morgan Exchange Traded. It trades about 0.12 of its potential returns per unit of risk. JP Morgan Exchange Traded is currently generating about -0.04 per unit of risk. If you would invest 10,881 in iShares iBoxx Investment on September 4, 2024 and sell it today you would earn a total of 153.00 from holding iShares iBoxx Investment or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares iBoxx Investment vs. JP Morgan Exchange Traded
Performance |
| Timeline |
| iShares iBoxx Investment |
| JP Morgan Exchange |
IShares IBoxx and JP Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBoxx and JP Morgan
The main advantage of trading using opposite IShares IBoxx and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBoxx position performs unexpectedly, JP Morgan 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 JP Morgan will offset losses from the drop in JP Morgan's long position.| IShares IBoxx vs. iShares iBoxx High | IShares IBoxx vs. iShares 1 3 Year | IShares IBoxx vs. iShares TIPS Bond | IShares IBoxx vs. iShares 7 10 Year |
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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