Correlation Between JPMorgan and IShares ESG
Can any of the company-specific risk be diversified away by investing in both JPMorgan and IShares ESG 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 and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan and iShares ESG Screened, you can compare the effects of market volatilities on JPMorgan and IShares ESG 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 with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan and IShares ESG.
Diversification Opportunities for JPMorgan and IShares ESG
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMorgan and IShares is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan and iShares ESG Screened in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Screened and JPMorgan 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 are associated (or correlated) with IShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG Screened has no effect on the direction of JPMorgan i.e., JPMorgan and IShares ESG go up and down completely randomly.
Pair Corralation between JPMorgan and IShares ESG
Given the investment horizon of 90 days JPMorgan is expected to generate 0.73 times more return on investment than IShares ESG. However, JPMorgan is 1.36 times less risky than IShares ESG. It trades about 0.1 of its potential returns per unit of risk. iShares ESG Screened is currently generating about 0.07 per unit of risk. If you would invest 5,032 in JPMorgan on August 30, 2024 and sell it today you would earn a total of 596.00 from holding JPMorgan or generate 11.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.05% |
| Values | Daily Returns |
JPMorgan vs. iShares ESG Screened
Performance |
| Timeline |
| JPMorgan |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iShares ESG Screened |
JPMorgan and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan and IShares ESG
The main advantage of trading using opposite JPMorgan and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan position performs unexpectedly, IShares ESG 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 ESG will offset losses from the drop in IShares ESG's long position.| JPMorgan vs. Vanguard Total Stock | JPMorgan vs. SPDR SP 500 | JPMorgan vs. iShares Core SP | JPMorgan vs. Vanguard Total Bond |
| IShares ESG vs. iShares ESG Screened | IShares ESG vs. iShares ESG Screened | IShares ESG vs. iShares ESG Advanced | IShares ESG vs. iShares ESG Advanced |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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