Correlation Between SPDR Barclays and JPMorgan Corporate
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and JPMorgan Corporate 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 Barclays and JPMorgan Corporate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Intermediate and JPMorgan Corporate Bond, you can compare the effects of market volatilities on SPDR Barclays and JPMorgan Corporate 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 Barclays with a short position of JPMorgan Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and JPMorgan Corporate.
Diversification Opportunities for SPDR Barclays and JPMorgan Corporate
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and JPMorgan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Intermediate and JPMorgan Corporate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Corporate Bond and SPDR Barclays 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 Barclays Intermediate are associated (or correlated) with JPMorgan Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Corporate Bond has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and JPMorgan Corporate go up and down completely randomly.
Pair Corralation between SPDR Barclays and JPMorgan Corporate
Given the investment horizon of 90 days SPDR Barclays Intermediate is expected to generate 0.6 times more return on investment than JPMorgan Corporate. However, SPDR Barclays Intermediate is 1.68 times less risky than JPMorgan Corporate. It trades about -0.16 of its potential returns per unit of risk. JPMorgan Corporate Bond is currently generating about -0.2 per unit of risk. If you would invest 3,252 in SPDR Barclays Intermediate on January 25, 2024 and sell it today you would lose (32.00) from holding SPDR Barclays Intermediate or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Intermediate vs. JPMorgan Corporate Bond
Performance |
| Timeline |
| SPDR Barclays Interm |
| JPMorgan Corporate Bond |
SPDR Barclays and JPMorgan Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and JPMorgan Corporate
The main advantage of trading using opposite SPDR Barclays and JPMorgan Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, JPMorgan Corporate 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 Corporate will offset losses from the drop in JPMorgan Corporate's long position.| SPDR Barclays vs. iShares iBoxx High | SPDR Barclays vs. iShares 1 3 Year | SPDR Barclays vs. iShares TIPS Bond | SPDR Barclays vs. iShares 7 10 Year |
| JPMorgan Corporate vs. iShares iBoxx High | JPMorgan Corporate vs. iShares 1 3 Year | JPMorgan Corporate vs. iShares TIPS Bond | JPMorgan Corporate vs. iShares 7 10 Year |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Commodity Directory Find actively traded commodities issued by global exchanges |