Correlation Between IShares Core and JPMorgan ETFs

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

By analyzing existing cross correlation between iShares Core MSCI and JPMorgan ETFs ICAV, you can compare the effects of market volatilities on IShares Core and JPMorgan ETFs 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 ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and JPMorgan ETFs.

Diversification Opportunities for IShares Core and JPMorgan ETFs

0.42

Correlation Coefficient

IShares Core  JPMorgan ETFs

Very weak diversification

The 3 months correlation between IShares and JPMorgan is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and JPMorgan ETFs ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan ETFs ICAV 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 MSCI are associated (or correlated) with JPMorgan ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan ETFs ICAV has no effect on the direction of IShares Core i.e., IShares Core and JPMorgan ETFs go up and down completely randomly.

Pair Corralation between IShares Core and JPMorgan ETFs

Assuming the 90 days trading horizon IShares Core is expected to generate 14.33 times less return on investment than JPMorgan ETFs. In addition to that, IShares Core is 1.32 times more volatile than JPMorgan ETFs ICAV. It trades about 0.01 of its total potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about 0.25 per unit of volatility. If you would invest  4,168  in JPMorgan ETFs ICAV on December 21, 2024 and sell it today you would earn a total of  419.00  from holding JPMorgan ETFs ICAV or generate 10.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

iShares Core MSCI  vs.  JPMorgan ETFs ICAV

iShares Core MSCI

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core MSCI are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IShares Core is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

JPMorgan ETFs ICAV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan ETFs ICAV are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, JPMorgan ETFs may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with IShares Core and JPMorgan ETFs

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

The idea behind iShares Core MSCI and JPMorgan ETFs ICAV 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.

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