Correlation Between Jpmorgan Emerging and Investment Grade

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

By analyzing existing cross correlation between Jpmorgan Emerging Markets and Investment Grade Bond, you can compare the effects of market volatilities on Jpmorgan Emerging and Investment Grade 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 Emerging with a short position of Investment Grade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Emerging and Investment Grade.

Diversification Opportunities for Jpmorgan Emerging and Investment Grade

0.04

Correlation Coefficient

Jpmorgan Emerging  Investment Grade

Significant diversification

The 3 months correlation between Jpmorgan and Investment is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Emerging Markets and Investment Grade Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Grade Bond and Jpmorgan Emerging 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 Emerging Markets are associated (or correlated) with Investment Grade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Grade Bond has no effect on the direction of Jpmorgan Emerging i.e., Jpmorgan Emerging and Investment Grade go up and down completely randomly.

Pair Corralation between Jpmorgan Emerging and Investment Grade

Assuming the 90 days horizon Jpmorgan Emerging Markets is expected to generate 2.83 times more return on investment than Investment Grade. However, Jpmorgan Emerging is 2.83 times more volatile than Investment Grade Bond. It trades about 0.05 of its potential returns per unit of risk. Investment Grade Bond is currently generating about -0.12 per unit of risk. If you would invest  2,957  in Jpmorgan Emerging Markets on September 12, 2024 and sell it today you would earn a total of  79.00  from holding Jpmorgan Emerging Markets or generate 2.67% return on investment over 90 days.

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

Jpmorgan Emerging Markets  vs.  Investment Grade Bond

Jpmorgan Emerging Markets

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Emerging Markets are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, Jpmorgan Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Investment Grade Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investment Grade Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Investment Grade is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jpmorgan Emerging and Investment Grade

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

The idea behind Jpmorgan Emerging Markets and Investment Grade Bond 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..