Correlation Between IShares Short and JPMorgan Municipal
Can any of the company-specific risk be diversified away by investing in both IShares 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 IShares 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 iShares Short Maturity and JPMorgan Municipal, you can compare the effects of market volatilities on IShares 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 IShares Short with a short position of JPMorgan Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Short and JPMorgan Municipal.
Diversification Opportunities for IShares Short and JPMorgan Municipal
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and JPMorgan is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding iShares Short Maturity and JPMorgan Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Municipal and IShares 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 iShares Short Maturity 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 IShares Short i.e., IShares Short and JPMorgan Municipal go up and down completely randomly.
Pair Corralation between IShares Short and JPMorgan Municipal
Given the investment horizon of 90 days iShares Short Maturity is expected to generate 0.24 times more return on investment than JPMorgan Municipal. However, iShares Short Maturity is 4.13 times less risky than JPMorgan Municipal. It trades about 0.36 of its potential returns per unit of risk. JPMorgan Municipal is currently generating about 0.06 per unit of risk. If you would invest 5,004 in iShares Short Maturity on November 5, 2024 and sell it today you would earn a total of 17.00 from holding iShares Short Maturity or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Short Maturity vs. JPMorgan Municipal
Performance |
| Timeline |
| iShares Short Maturity |
| JPMorgan Municipal |
IShares Short and JPMorgan Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Short and JPMorgan Municipal
The main advantage of trading using opposite IShares Short and JPMorgan Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 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.| IShares Short vs. iShares Treasury Floating | IShares Short vs. iShares Short Term National | IShares Short vs. iShares Short Maturity | IShares Short vs. iShares Interest Rate |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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