Correlation Between Jpmorgan Corporate and Voya Investment

Can any of the company-specific risk be diversified away by investing in both Jpmorgan Corporate and Voya Investment 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 Corporate and Voya Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jpmorgan Porate Bond and Voya Investment Grade, you can compare the effects of market volatilities on Jpmorgan Corporate and Voya Investment 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 Corporate with a short position of Voya Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Corporate and Voya Investment.

Diversification Opportunities for Jpmorgan Corporate and Voya Investment

0.95

Correlation Coefficient

Jpmorgan Corporate  Voya Investment

Almost no diversification

The 3 months correlation between Jpmorgan and Voya is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Porate Bond and Voya Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Investment Grade and Jpmorgan Corporate 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 Porate Bond are associated (or correlated) with Voya Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Investment Grade has no effect on the direction of Jpmorgan Corporate i.e., Jpmorgan Corporate and Voya Investment go up and down completely randomly.

Pair Corralation between Jpmorgan Corporate and Voya Investment

Assuming the 90 days horizon Jpmorgan Corporate is expected to generate 1.58 times less return on investment than Voya Investment. But when comparing it to its historical volatility, Jpmorgan Porate Bond is 1.02 times less risky than Voya Investment. It trades about 0.06 of its potential returns per unit of risk. Voya Investment Grade is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  899.00  in Voya Investment Grade on December 29, 2024 and sell it today you would earn a total of  16.00  from holding Voya Investment Grade or generate 1.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Jpmorgan Porate Bond  vs.  Voya Investment Grade

Jpmorgan Porate Bond

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Porate Bond are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Corporate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Investment Grade

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Investment Grade are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jpmorgan Corporate and Voya Investment

The main advantage of trading using opposite Jpmorgan Corporate and Voya Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Corporate position performs unexpectedly, Voya Investment 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 Voya Investment will offset losses from the drop in Voya Investment's long position.

The idea behind Jpmorgan Porate Bond and Voya Investment Grade pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.