Correlation Between JPMorgan Ultra and IShares Interest

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

Diversification Opportunities for JPMorgan Ultra and IShares Interest

0.92

Correlation Coefficient

JPMorgan Ultra  IShares Interest

Almost no diversification

The 3 months correlation between JPMorgan and IShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Ultra Short Income and iShares Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Interest Rate 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 IShares Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Interest Rate has no effect on the direction of JPMorgan Ultra i.e., JPMorgan Ultra and IShares Interest go up and down completely randomly.

Pair Corralation between JPMorgan Ultra and IShares Interest

Given the investment horizon of 90 days JPMorgan Ultra is expected to generate 2.35 times less return on investment than IShares Interest. In addition to that, JPMorgan Ultra is 1.41 times more volatile than iShares Interest Rate. It trades about 0.11 of its total potential returns per unit of risk. iShares Interest Rate is currently generating about 0.36 per unit of volatility. If you would invest  9,170  in iShares Interest Rate on February 5, 2024 and sell it today you would earn a total of  197.00  from holding iShares Interest Rate or generate 2.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	97.73%
Values	Daily Returns

JPMorgan Ultra Short Income  vs.  iShares Interest Rate

JPMorgan Ultra Short

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Ultra Short Income are ranked lower than 9 (%) 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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

iShares Interest Rate

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Interest Rate are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, IShares Interest is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with JPMorgan Ultra and IShares Interest

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

The idea behind JPMorgan Ultra Short Income and iShares Interest Rate 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..