Correlation Between IShares 0 and JPMorgan Ultra

Can any of the company-specific risk be diversified away by investing in both IShares 0 and JPMorgan Ultra 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 0 and JPMorgan Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares 0 3 Month and JPMorgan Ultra Short Income, you can compare the effects of market volatilities on IShares 0 and JPMorgan Ultra 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 0 with a short position of JPMorgan Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 0 and JPMorgan Ultra.

Diversification Opportunities for IShares 0 and JPMorgan Ultra

0.97

Correlation Coefficient

IShares 0  JPMorgan Ultra

Almost no diversification

The 3 months correlation between IShares and JPMorgan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares 0 3 Month and JPMorgan Ultra Short Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Ultra Short and IShares 0 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 0 3 Month are associated (or correlated) with JPMorgan Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Ultra Short has no effect on the direction of IShares 0 i.e., IShares 0 and JPMorgan Ultra go up and down completely randomly.

Pair Corralation between IShares 0 and JPMorgan Ultra

Given the investment horizon of 90 days iShares 0 3 Month is expected to generate 0.43 times more return on investment than JPMorgan Ultra. However, iShares 0 3 Month is 2.34 times less risky than JPMorgan Ultra. It trades about 1.18 of its potential returns per unit of risk. JPMorgan Ultra Short Income is currently generating about 0.5 per unit of risk. If you would invest  9,984  in iShares 0 3 Month on September 23, 2024 and sell it today you would earn a total of  36.00  from holding iShares 0 3 Month or generate 0.36% return on investment over 90 days.

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

iShares 0 3 Month  vs.  JPMorgan Ultra Short Income

iShares 0 3

Risk-Adjusted Performance

87 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in iShares 0 3 Month are ranked lower than 87 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, IShares 0 is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

JPMorgan Ultra Short

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Ultra Short Income are ranked lower than 28 (%) 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.

Pair Trading with IShares 0 and JPMorgan Ultra

The main advantage of trading using opposite IShares 0 and JPMorgan Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 0 position performs unexpectedly, JPMorgan Ultra 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 Ultra will offset losses from the drop in JPMorgan Ultra's long position.

The idea behind iShares 0 3 Month and JPMorgan Ultra Short Income 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.