Correlation Between IShares Core and JPMorgan Fundamental

Can any of the company-specific risk be diversified away by investing in both IShares Core and JPMorgan Fundamental 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 IShares Core and JPMorgan Fundamental into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Core SP and JPMorgan Fundamental Data, you can compare the effects of market volatilities on IShares Core and JPMorgan Fundamental 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 IShares Core with a short position of JPMorgan Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and JPMorgan Fundamental.

Diversification Opportunities for IShares Core and JPMorgan Fundamental

0.94

Correlation Coefficient

IShares Core  JPMorgan Fundamental

Almost no diversification

The 3 months correlation between IShares and JPMorgan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and JPMorgan Fundamental Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Fundamental Data and IShares Core 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 iShares Core SP are associated (or correlated) with JPMorgan Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Fundamental Data has no effect on the direction of IShares Core i.e., IShares Core and JPMorgan Fundamental go up and down completely randomly.

Pair Corralation between IShares Core and JPMorgan Fundamental

Considering the 90-day investment horizon iShares Core SP is expected to under-perform the JPMorgan Fundamental. But the etf apears to be less risky and, when comparing its historical volatility, iShares Core SP is 1.12 times less risky than JPMorgan Fundamental. The etf trades about -0.03 of its potential returns per unit of risk. The JPMorgan Fundamental Data is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  5,731  in JPMorgan Fundamental Data on November 19, 2024 and sell it today you would lose (30.40) from holding JPMorgan Fundamental Data or give up 0.53% of portfolio value over 90 days.

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

iShares Core SP  vs.  JPMorgan Fundamental Data

iShares Core SP

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Core SP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking indicators, IShares Core is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

JPMorgan Fundamental Data

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan Fundamental Data has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, JPMorgan Fundamental is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IShares Core and JPMorgan Fundamental

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

The idea behind iShares Core SP and JPMorgan Fundamental Data 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.