Correlation Between IVH and JP Morgan

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

By analyzing existing cross correlation between IVH and JP Morgan Exchange Traded, you can compare the effects of market volatilities on IVH 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 IVH with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of IVH and JP Morgan.

Diversification Opportunities for IVH and JP Morgan

0.0

Correlation Coefficient

IVH  JP Morgan

Pay attention - limited upside

The 3 months correlation between IVH and JIRE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IVH 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 IVH 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 IVH 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 IVH i.e., IVH and JP Morgan go up and down completely randomly.

Pair Corralation between IVH and JP Morgan

If you would invest  5,913  in JP Morgan Exchange Traded on December 26, 2024 and sell it today you would earn a total of  542.00  from holding JP Morgan Exchange Traded or generate 9.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

IVH  vs.  JP Morgan Exchange Traded

IVH

Risk-Adjusted Performance

Very Weak

Over the last 90 days IVH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, IVH is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

JP Morgan Exchange

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JP Morgan Exchange Traded are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, JP Morgan may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with IVH and JP Morgan

The main advantage of trading using opposite IVH and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IVH 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 IVH 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.