Correlation Between JPMorgan Short and JIB

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

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

Diversification Opportunities for JPMorgan Short and JIB

-0.59

Correlation Coefficient

JPMorgan Short  JIB

Excellent diversification

The 3 months correlation between JPMorgan and JIB is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Short Duration and JIB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIB and JPMorgan Short 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 Short Duration are associated (or correlated) with JIB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIB has no effect on the direction of JPMorgan Short i.e., JPMorgan Short and JIB go up and down completely randomly.

Pair Corralation between JPMorgan Short and JIB

If you would invest  4,657  in JPMorgan Short Duration on October 26, 2024 and sell it today you would earn a total of  19.00  from holding JPMorgan Short Duration or generate 0.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.56%
Values	Daily Returns

JPMorgan Short Duration  vs.  JIB

JPMorgan Short Duration

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Short Duration are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, JPMorgan Short is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

JIB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JIB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, JIB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JPMorgan Short and JIB

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

The idea behind JPMorgan Short Duration and JIB 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.