Correlation Between SPDR Bloomberg and JPMorgan Ultra

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

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

Diversification Opportunities for SPDR Bloomberg and JPMorgan Ultra

0.96

Correlation Coefficient

SPDR Bloomberg  JPMorgan Ultra

Almost no diversification

The 3 months correlation between SPDR and JPMorgan is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Investment 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 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 Investment 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 SPDR Bloomberg i.e., SPDR Bloomberg and JPMorgan Ultra go up and down completely randomly.

Pair Corralation between SPDR Bloomberg and JPMorgan Ultra

Given the investment horizon of 90 days SPDR Bloomberg Investment is expected to generate 1.87 times more return on investment than JPMorgan Ultra. However, SPDR Bloomberg is 1.87 times more volatile than JPMorgan Ultra Short Income. It trades about 0.34 of its potential returns per unit of risk. JPMorgan Ultra Short Income is currently generating about 0.62 per unit of risk. If you would invest  2,991  in SPDR Bloomberg Investment on September 15, 2024 and sell it today you would earn a total of  87.00  from holding SPDR Bloomberg Investment or generate 2.91% 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 Investment  vs.  JPMorgan Ultra Short Income

SPDR Bloomberg Investment

Risk-Adjusted Performance

35 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg Investment are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, SPDR Bloomberg is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

JPMorgan Ultra Short

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Ultra Short Income are ranked lower than 32 (%) 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 SPDR Bloomberg and JPMorgan Ultra

The main advantage of trading using opposite SPDR Bloomberg and JPMorgan Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg 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 SPDR Bloomberg Investment 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.