Correlation Between Vanguard Emerging and JPMorgan USD
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging and JPMorgan USD 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 Vanguard Emerging and JPMorgan USD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Emerging Markets and JPMorgan USD Emerging, you can compare the effects of market volatilities on Vanguard Emerging and JPMorgan USD 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 Vanguard Emerging with a short position of JPMorgan USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and JPMorgan USD.
Diversification Opportunities for Vanguard Emerging and JPMorgan USD
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and JPMorgan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and JPMorgan USD Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan USD Emerging and Vanguard Emerging 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 Vanguard Emerging Markets are associated (or correlated) with JPMorgan USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan USD Emerging has no effect on the direction of Vanguard Emerging i.e., Vanguard Emerging and JPMorgan USD go up and down completely randomly.
Pair Corralation between Vanguard Emerging and JPMorgan USD
Given the investment horizon of 90 days Vanguard Emerging Markets is expected to generate 0.95 times more return on investment than JPMorgan USD. However, Vanguard Emerging Markets is 1.06 times less risky than JPMorgan USD. It trades about 0.2 of its potential returns per unit of risk. JPMorgan USD Emerging is currently generating about 0.12 per unit of risk. If you would invest 6,411 in Vanguard Emerging Markets on September 1, 2024 and sell it today you would earn a total of 114.00 from holding Vanguard Emerging Markets or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. JPMorgan USD Emerging
Performance |
| Timeline |
| Vanguard Emerging Markets |
| JPMorgan USD Emerging |
Vanguard Emerging and JPMorgan USD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and JPMorgan USD
The main advantage of trading using opposite Vanguard Emerging and JPMorgan USD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging position performs unexpectedly, JPMorgan USD 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 USD will offset losses from the drop in JPMorgan USD's long position.| Vanguard Emerging vs. iShares JP Morgan | Vanguard Emerging vs. SPDR Bloomberg Barclays | Vanguard Emerging vs. SPDR DoubleLine Emerging | Vanguard Emerging vs. JPMorgan USD Emerging |
| JPMorgan USD vs. SPDR Bloomberg Emerging | JPMorgan USD vs. SPDR Bloomberg Barclays | JPMorgan USD vs. VanEck JP Morgan | JPMorgan USD vs. SPDR Bloomberg International |
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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