Correlation Between IShares VII and JPMorgan ETFs

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

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

Diversification Opportunities for IShares VII and JPMorgan ETFs

0.21

Correlation Coefficient

IShares VII  JPMorgan ETFs

Modest diversification

The 3 months correlation between IShares and JPMorgan is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding iShares VII PLC and JPMorgan ETFs ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan ETFs ICAV and IShares VII 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 iShares VII PLC are associated (or correlated) with JPMorgan ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan ETFs ICAV has no effect on the direction of IShares VII i.e., IShares VII and JPMorgan ETFs go up and down completely randomly.

Pair Corralation between IShares VII and JPMorgan ETFs

Assuming the 90 days trading horizon iShares VII PLC is expected to generate 1.51 times more return on investment than JPMorgan ETFs. However, IShares VII is 1.51 times more volatile than JPMorgan ETFs ICAV. It trades about 0.04 of its potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about -0.08 per unit of risk. If you would invest  23,805  in iShares VII PLC on September 30, 2024 and sell it today you would earn a total of  555.00  from holding iShares VII PLC or generate 2.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

iShares VII PLC  vs.  JPMorgan ETFs ICAV

iShares VII PLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares VII PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IShares VII is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

JPMorgan ETFs ICAV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan ETFs ICAV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, JPMorgan ETFs is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IShares VII and JPMorgan ETFs

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

The idea behind iShares VII PLC and JPMorgan ETFs ICAV 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.