Correlation Between JPMorgan Ultra and IndexIQ

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

By analyzing existing cross correlation between JPMorgan Ultra Short Income and IndexIQ, you can compare the effects of market volatilities on JPMorgan Ultra and IndexIQ 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 JPMorgan Ultra with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Ultra and IndexIQ.

Diversification Opportunities for JPMorgan Ultra and IndexIQ

0.95

Correlation Coefficient

JPMorgan Ultra  IndexIQ

Almost no diversification

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

Pair Corralation between JPMorgan Ultra and IndexIQ

If you would invest  4,989  in JPMorgan Ultra Short Income on October 10, 2024 and sell it today you would earn a total of  53.00  from holding JPMorgan Ultra Short Income or generate 1.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	1.61%
Values	Daily Returns

JPMorgan Ultra Short Income  vs.  IndexIQ

JPMorgan Ultra Short

Risk-Adjusted Performance

42 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Ultra Short Income are ranked lower than 42 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JPMorgan Ultra is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

IndexIQ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IndexIQ has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, IndexIQ is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with JPMorgan Ultra and IndexIQ

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

The idea behind JPMorgan Ultra Short Income and IndexIQ 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.