Correlation Between JP Morgan and IShares

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

Diversification Opportunities for JP Morgan and IShares

0.0

Correlation Coefficient

JP Morgan  IShares

Pay attention - limited upside

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

Pair Corralation between JP Morgan and IShares

If you would invest  5,256  in JP Morgan Exchange Traded on October 9, 2024 and sell it today you would earn a total of  663.00  from holding JP Morgan Exchange Traded or generate 12.61% return on investment over 90 days.

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

JP Morgan Exchange Traded  vs.  IShares

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 weak 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.

IShares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IShares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IShares is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JP Morgan and IShares

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

The idea behind JP Morgan Exchange Traded and IShares 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.