Correlation Between SPDR Nuveen and JP Morgan

Can any of the company-specific risk be diversified away by investing in both SPDR Nuveen 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 Nuveen 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 Nuveen Bloomberg and JP Morgan Exchange Traded, you can compare the effects of market volatilities on SPDR Nuveen 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 Nuveen with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Nuveen and JP Morgan.

Diversification Opportunities for SPDR Nuveen and JP Morgan

0.87

Correlation Coefficient

SPDR Nuveen  JP Morgan

Very poor diversification

The 3 months correlation between SPDR and JMHI is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Nuveen Bloomberg 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 Nuveen 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 Nuveen Bloomberg 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 Nuveen i.e., SPDR Nuveen and JP Morgan go up and down completely randomly.

Pair Corralation between SPDR Nuveen and JP Morgan

Given the investment horizon of 90 days SPDR Nuveen Bloomberg is expected to generate 1.3 times more return on investment than JP Morgan. However, SPDR Nuveen is 1.3 times more volatile than JP Morgan Exchange Traded. It trades about 0.22 of its potential returns per unit of risk. JP Morgan Exchange Traded is currently generating about 0.27 per unit of risk. If you would invest  2,571  in SPDR Nuveen Bloomberg on December 3, 2024 and sell it today you would earn a total of  34.00  from holding SPDR Nuveen Bloomberg or generate 1.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

SPDR Nuveen Bloomberg  vs.  JP Morgan Exchange Traded

SPDR Nuveen Bloomberg

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Nuveen Bloomberg are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, SPDR Nuveen is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

JP Morgan Exchange

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JP Morgan Exchange Traded are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, JP Morgan is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SPDR Nuveen and JP Morgan

The main advantage of trading using opposite SPDR Nuveen and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Nuveen 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.

The idea behind SPDR Nuveen Bloomberg and JP Morgan Exchange Traded 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.