Correlation Between SPDR Bloomberg and JPMorgan Inflation
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and JPMorgan Inflation 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 SPDR Bloomberg and JPMorgan Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg 1 10 and JPMorgan Inflation Managed, you can compare the effects of market volatilities on SPDR Bloomberg and JPMorgan Inflation 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 SPDR Bloomberg with a short position of JPMorgan Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and JPMorgan Inflation.
Diversification Opportunities for SPDR Bloomberg and JPMorgan Inflation
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and JPMorgan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg 1 10 and JPMorgan Inflation Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Inflation and SPDR Bloomberg 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 SPDR Bloomberg 1 10 are associated (or correlated) with JPMorgan Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Inflation has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and JPMorgan Inflation go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and JPMorgan Inflation
Given the investment horizon of 90 days SPDR Bloomberg is expected to generate 1.43 times less return on investment than JPMorgan Inflation. But when comparing it to its historical volatility, SPDR Bloomberg 1 10 is 1.1 times less risky than JPMorgan Inflation. It trades about 0.06 of its potential returns per unit of risk. JPMorgan Inflation Managed is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,476 in JPMorgan Inflation Managed on September 25, 2024 and sell it today you would earn a total of 195.00 from holding JPMorgan Inflation Managed or generate 4.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
SPDR Bloomberg 1 10 vs. JPMorgan Inflation Managed
Performance |
Timeline |
SPDR Bloomberg 1 |
JPMorgan Inflation |
SPDR Bloomberg and JPMorgan Inflation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR Bloomberg and JPMorgan Inflation
The main advantage of trading using opposite SPDR Bloomberg and JPMorgan Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, JPMorgan Inflation 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 Inflation will offset losses from the drop in JPMorgan Inflation's long position.SPDR Bloomberg vs. PIMCO Broad TIPS | SPDR Bloomberg vs. PIMCO 15 Year | SPDR Bloomberg vs. SPDR FTSE International | SPDR Bloomberg vs. FlexShares iBoxx 5 Year |
JPMorgan Inflation vs. Dimensional ETF Trust | JPMorgan Inflation vs. JPMorgan Short Duration | JPMorgan Inflation vs. Goldman Sachs Access | JPMorgan Inflation vs. SPDR Bloomberg 1 10 |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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