Correlation Between Bank of America and JPMorgan Global
Can any of the company-specific risk be diversified away by investing in both Bank of America and JPMorgan Global 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 Bank of America and JPMorgan Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and JPMorgan Global Equity, you can compare the effects of market volatilities on Bank of America and JPMorgan Global 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 Bank of America with a short position of JPMorgan Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and JPMorgan Global.
Diversification Opportunities for Bank of America and JPMorgan Global
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and JPMorgan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and JPMorgan Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Global Equity and Bank of America 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 Bank of America are associated (or correlated) with JPMorgan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Global Equity has no effect on the direction of Bank of America i.e., Bank of America and JPMorgan Global go up and down completely randomly.
Pair Corralation between Bank of America and JPMorgan Global
Considering the 90-day investment horizon Bank of America is expected to under-perform the JPMorgan Global. In addition to that, Bank of America is 1.54 times more volatile than JPMorgan Global Equity. It trades about -0.36 of its total potential returns per unit of risk. JPMorgan Global Equity is currently generating about 0.07 per unit of volatility. If you would invest 5,112 in JPMorgan Global Equity on November 28, 2024 and sell it today you would earn a total of 44.00 from holding JPMorgan Global Equity or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. JPMorgan Global Equity
Performance |
| Timeline |
| Bank of America |
| JPMorgan Global Equity |
Bank of America and JPMorgan Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and JPMorgan Global
The main advantage of trading using opposite Bank of America and JPMorgan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, JPMorgan Global 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 Global will offset losses from the drop in JPMorgan Global's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| JPMorgan Global vs. JPMorgan Equity Premium | JPMorgan Global vs. JPMorgan Global Research | JPMorgan Global vs. JPMorgan 100Q Equity | JPMorgan Global vs. JPMorgan Global Select |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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