Correlation Between JPMorgan Fundamental and IShares SP
Can any of the company-specific risk be diversified away by investing in both JPMorgan Fundamental and IShares SP 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 Fundamental and IShares SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Fundamental Data and iShares SP 500, you can compare the effects of market volatilities on JPMorgan Fundamental and IShares SP 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 Fundamental with a short position of IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Fundamental and IShares SP.
Diversification Opportunities for JPMorgan Fundamental and IShares SP
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPMorgan and IShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Fundamental Data and iShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP 500 and JPMorgan Fundamental 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 Fundamental Data are associated (or correlated) with IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP 500 has no effect on the direction of JPMorgan Fundamental i.e., JPMorgan Fundamental and IShares SP go up and down completely randomly.
Pair Corralation between JPMorgan Fundamental and IShares SP
Given the investment horizon of 90 days JPMorgan Fundamental is expected to generate 9.44 times less return on investment than IShares SP. But when comparing it to its historical volatility, JPMorgan Fundamental Data is 2.52 times less risky than IShares SP. It trades about 0.05 of its potential returns per unit of risk. iShares SP 500 is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 10,099 in iShares SP 500 on September 14, 2024 and sell it today you would earn a total of 318.00 from holding iShares SP 500 or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Fundamental Data vs. iShares SP 500
Performance |
| Timeline |
| JPMorgan Fundamental Data |
| iShares SP 500 |
JPMorgan Fundamental and IShares SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Fundamental and IShares SP
The main advantage of trading using opposite JPMorgan Fundamental and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Fundamental position performs unexpectedly, IShares SP 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 SP will offset losses from the drop in IShares SP's long position.| JPMorgan Fundamental vs. FT Vest Equity | JPMorgan Fundamental vs. Northern Lights | JPMorgan Fundamental vs. Dimensional International High | JPMorgan Fundamental vs. Matthews China Discovery |
| IShares SP vs. FT Vest Equity | IShares SP vs. Northern Lights | IShares SP vs. Dimensional International High | IShares SP vs. JPMorgan Fundamental Data |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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