Correlation Between IShares Core and JPMorgan Equity

Can any of the company-specific risk be diversified away by investing in both IShares Core and JPMorgan Equity 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 Equity 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 Equity Focus, you can compare the effects of market volatilities on IShares Core and JPMorgan Equity 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 Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and JPMorgan Equity.

Diversification Opportunities for IShares Core and JPMorgan Equity

0.0

Correlation Coefficient

IShares Core  JPMorgan Equity

Pay attention - limited upside

The 3 months correlation between IShares and JPMorgan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and JPMorgan Equity Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Equity Focus 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 Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Equity Focus has no effect on the direction of IShares Core i.e., IShares Core and JPMorgan Equity go up and down completely randomly.

Pair Corralation between IShares Core and JPMorgan Equity

If you would invest (100.00) in JPMorgan Equity Focus on December 29, 2024 and sell it today you would earn a total of  100.00  from holding JPMorgan Equity Focus or generate -100.0% return on investment over 90 days.

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

iShares Core SP  vs.  JPMorgan Equity Focus

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. In spite of fairly stable basic indicators, IShares Core is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

JPMorgan Equity Focus

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan Equity Focus has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, JPMorgan Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IShares Core and JPMorgan Equity

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

The idea behind iShares Core SP and JPMorgan Equity Focus 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.