Correlation Between Acme United and JPMORGAN

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Can any of the company-specific risk be diversified away by investing in both Acme United and JPMORGAN 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 Acme United and JPMORGAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acme United and JPMORGAN CHASE CO, you can compare the effects of market volatilities on Acme United and JPMORGAN 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 Acme United with a short position of JPMORGAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acme United and JPMORGAN.

Diversification Opportunities for Acme United and JPMORGAN

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Acme and JPMORGAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Acme United and JPMORGAN CHASE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMORGAN CHASE CO and Acme United 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 Acme United are associated (or correlated) with JPMORGAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMORGAN CHASE CO has no effect on the direction of Acme United i.e., Acme United and JPMORGAN go up and down completely randomly.

Pair Corralation between Acme United and JPMORGAN

Considering the 90-day investment horizon Acme United is expected to generate 2.3 times more return on investment than JPMORGAN. However, Acme United is 2.3 times more volatile than JPMORGAN CHASE CO. It trades about 0.03 of its potential returns per unit of risk. JPMORGAN CHASE CO is currently generating about -0.12 per unit of risk. If you would invest  4,317  in Acme United on September 3, 2024 and sell it today you would earn a total of  134.00  from holding Acme United or generate 3.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy96.88%
ValuesDaily Returns

Acme United  vs.  JPMORGAN CHASE CO

 Performance 
       Timeline  
Acme United 

Risk-Adjusted Performance

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Compared to the overall equity markets, risk-adjusted returns on investments in Acme United are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Acme United is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
JPMORGAN CHASE CO 

Risk-Adjusted Performance

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Over the last 90 days JPMORGAN CHASE CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for JPMORGAN CHASE CO investors.

Acme United and JPMORGAN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Acme United and JPMORGAN

The main advantage of trading using opposite Acme United and JPMORGAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acme United position performs unexpectedly, JPMORGAN 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 will offset losses from the drop in JPMORGAN's long position.
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The idea behind Acme United and JPMORGAN CHASE CO 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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