Correlation Between JP Morgan and IQ Candriam

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

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

Diversification Opportunities for JP Morgan and IQ Candriam

0.95

Correlation Coefficient

JP Morgan  IQ Candriam

Almost no diversification

The 3 months correlation between JIRE and IQSI is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Exchange Traded and IQ Candriam ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Candriam ESG and JP Morgan 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 JP Morgan Exchange Traded are associated (or correlated) with IQ Candriam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Candriam ESG has no effect on the direction of JP Morgan i.e., JP Morgan and IQ Candriam go up and down completely randomly.

Pair Corralation between JP Morgan and IQ Candriam

Given the investment horizon of 90 days JP Morgan Exchange Traded is expected to under-perform the IQ Candriam. In addition to that, JP Morgan is 1.05 times more volatile than IQ Candriam ESG. It trades about -0.01 of its total potential returns per unit of risk. IQ Candriam ESG is currently generating about 0.01 per unit of volatility. If you would invest  2,844  in IQ Candriam ESG on October 22, 2024 and sell it today you would earn a total of  38.70  from holding IQ Candriam ESG or generate 1.36% return on investment over 90 days.

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

JP Morgan Exchange Traded  vs.  IQ Candriam ESG

JP Morgan Exchange

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JP Morgan Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

IQ Candriam ESG

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with JP Morgan and IQ Candriam

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

The idea behind JP Morgan Exchange Traded and IQ Candriam ESG 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.