Correlation Between US Treasury and JPMorgan International
Can any of the company-specific risk be diversified away by investing in both US Treasury and JPMorgan International 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 US Treasury and JPMorgan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Treasury 12 and JPMorgan International Growth, you can compare the effects of market volatilities on US Treasury and JPMorgan International 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 US Treasury with a short position of JPMorgan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Treasury and JPMorgan International.
Diversification Opportunities for US Treasury and JPMorgan International
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between OBIL and JPMorgan is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding US Treasury 12 and JPMorgan International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan International and US Treasury 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 US Treasury 12 are associated (or correlated) with JPMorgan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan International has no effect on the direction of US Treasury i.e., US Treasury and JPMorgan International go up and down completely randomly.
Pair Corralation between US Treasury and JPMorgan International
Given the investment horizon of 90 days US Treasury is expected to generate 6.92 times less return on investment than JPMorgan International. But when comparing it to its historical volatility, US Treasury 12 is 48.79 times less risky than JPMorgan International. It trades about 0.86 of its potential returns per unit of risk. JPMorgan International Growth is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,331 in JPMorgan International Growth on November 5, 2024 and sell it today you would earn a total of 134.95 from holding JPMorgan International Growth or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
US Treasury 12 vs. JPMorgan International Growth
Performance |
| Timeline |
| US Treasury 12 |
| JPMorgan International |
US Treasury and JPMorgan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Treasury and JPMorgan International
The main advantage of trading using opposite US Treasury and JPMorgan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Treasury position performs unexpectedly, JPMorgan International 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 International will offset losses from the drop in JPMorgan International's long position.| US Treasury vs. Rbb Fund | US Treasury vs. Rbb Fund | US Treasury vs. Rbb Fund | US Treasury vs. US Treasury 6 |
| JPMorgan International vs. American Century ETF | JPMorgan International vs. TrueShares Technology AI | JPMorgan International vs. JPMorgan Quality Factor | JPMorgan International vs. JPMorgan USD Emerging |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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