Correlation Between Bondbloxx ETF and JP Morgan

Can any of the company-specific risk be diversified away by investing in both Bondbloxx ETF and JP Morgan 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 Bondbloxx ETF and JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bondbloxx ETF Trust and JP Morgan Exchange Traded, you can compare the effects of market volatilities on Bondbloxx ETF and JP Morgan 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 Bondbloxx ETF with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bondbloxx ETF and JP Morgan.

Diversification Opportunities for Bondbloxx ETF and JP Morgan

0.99

Correlation Coefficient

Bondbloxx ETF  JP Morgan

No risk reduction

The 3 months correlation between Bondbloxx and BBIB is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and JP Morgan Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Exchange and Bondbloxx ETF 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 Bondbloxx ETF Trust are associated (or correlated) with JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Exchange has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and JP Morgan go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and JP Morgan

Given the investment horizon of 90 days Bondbloxx ETF Trust is expected to under-perform the JP Morgan. In addition to that, Bondbloxx ETF is 2.01 times more volatile than JP Morgan Exchange Traded. It trades about -0.05 of its total potential returns per unit of risk. JP Morgan Exchange Traded is currently generating about -0.04 per unit of volatility. If you would invest  9,782  in JP Morgan Exchange Traded on September 13, 2024 and sell it today you would lose (52.08) from holding JP Morgan Exchange Traded or give up 0.53% of portfolio value over 90 days.

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

Bondbloxx ETF Trust  vs.  JP Morgan Exchange Traded

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Bondbloxx ETF is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

JP Morgan Exchange

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JP Morgan Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, JP Morgan is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bondbloxx ETF and JP Morgan

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

The idea behind Bondbloxx ETF Trust and JP Morgan Exchange Traded 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.