Correlation Between IShares Global and JPMorgan BetaBuilders

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

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

Diversification Opportunities for IShares Global and JPMorgan BetaBuilders

0.91

Correlation Coefficient

IShares Global  JPMorgan BetaBuilders

Almost no diversification

The 3 months correlation between IShares and JPMorgan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global REIT and JPMorgan BetaBuilders MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan BetaBuilders and IShares Global 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 Global REIT are associated (or correlated) with JPMorgan BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan BetaBuilders has no effect on the direction of IShares Global i.e., IShares Global and JPMorgan BetaBuilders go up and down completely randomly.

Pair Corralation between IShares Global and JPMorgan BetaBuilders

Given the investment horizon of 90 days iShares Global REIT is expected to generate 0.86 times more return on investment than JPMorgan BetaBuilders. However, iShares Global REIT is 1.16 times less risky than JPMorgan BetaBuilders. It trades about 0.04 of its potential returns per unit of risk. JPMorgan BetaBuilders MSCI is currently generating about 0.01 per unit of risk. If you would invest  2,426  in iShares Global REIT on May 7, 2025 and sell it today you would earn a total of  45.00  from holding iShares Global REIT or generate 1.85% return on investment over 90 days.

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

iShares Global REIT  vs.  JPMorgan BetaBuilders MSCI

iShares Global REIT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global REIT are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, IShares Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

JPMorgan BetaBuilders

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan BetaBuilders MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JPMorgan BetaBuilders is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IShares Global and JPMorgan BetaBuilders

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

The idea behind iShares Global REIT and JPMorgan BetaBuilders MSCI 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.