Correlation Between SPDR Barclays and JP Morgan
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays 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 SPDR Barclays and JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Long and JP Morgan Exchange Traded, you can compare the effects of market volatilities on SPDR Barclays 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 SPDR Barclays with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and JP Morgan.
Diversification Opportunities for SPDR Barclays and JP Morgan
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and BBSB is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Long 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 SPDR Barclays 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 SPDR Barclays Long 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 SPDR Barclays i.e., SPDR Barclays and JP Morgan go up and down completely randomly.
Pair Corralation between SPDR Barclays and JP Morgan
Given the investment horizon of 90 days SPDR Barclays Long is expected to generate 10.38 times more return on investment than JP Morgan. However, SPDR Barclays is 10.38 times more volatile than JP Morgan Exchange Traded. It trades about 0.09 of its potential returns per unit of risk. JP Morgan Exchange Traded is currently generating about 0.13 per unit of risk. If you would invest 2,739 in SPDR Barclays Long on September 3, 2024 and sell it today you would earn a total of 48.00 from holding SPDR Barclays Long or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Long vs. JP Morgan Exchange Traded
Performance |
| Timeline |
| SPDR Barclays Long |
| JP Morgan Exchange |
SPDR Barclays and JP Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and JP Morgan
The main advantage of trading using opposite SPDR Barclays and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays 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.| SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. SPDR Portfolio Intermediate | SPDR Barclays vs. SPDR Barclays Long | SPDR Barclays vs. SPDR Barclays Intermediate |
| JP Morgan vs. iShares 7 10 Year | JP Morgan vs. iShares iBoxx Investment | JP Morgan vs. iShares TIPS Bond | JP Morgan vs. iShares 3 7 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |