Correlation Between JPMorgan Realty and IShares Global

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

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

Diversification Opportunities for JPMorgan Realty and IShares Global

0.93

Correlation Coefficient

JPMorgan Realty  IShares Global

Almost no diversification

The 3 months correlation between JPMorgan and IShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Realty Income and iShares Global REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global REIT and JPMorgan Realty 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 Realty Income are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global REIT has no effect on the direction of JPMorgan Realty i.e., JPMorgan Realty and IShares Global go up and down completely randomly.

Pair Corralation between JPMorgan Realty and IShares Global

Given the investment horizon of 90 days JPMorgan Realty Income is expected to under-perform the IShares Global. But the etf apears to be less risky and, when comparing its historical volatility, JPMorgan Realty Income is 1.0 times less risky than IShares Global. The etf trades about -0.34 of its potential returns per unit of risk. The iShares Global REIT is currently generating about -0.29 of returns per unit of risk over similar time horizon. If you would invest  2,572  in iShares Global REIT on September 25, 2024 and sell it today you would lose (163.00) from holding iShares Global REIT or give up 6.34% of portfolio value over 90 days.

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

JPMorgan Realty Income  vs.  iShares Global REIT

JPMorgan Realty Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Realty Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

iShares Global REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Global REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with JPMorgan Realty and IShares Global

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

The idea behind JPMorgan Realty Income and iShares Global REIT 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.