Correlation Between Sierra Bancorp and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Sierra Bancorp and JPMorgan Chase 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 Sierra Bancorp and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sierra Bancorp and JPMorgan Chase Co, you can compare the effects of market volatilities on Sierra Bancorp and JPMorgan Chase 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 Sierra Bancorp with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sierra Bancorp and JPMorgan Chase.
Diversification Opportunities for Sierra Bancorp and JPMorgan Chase
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sierra and JPMorgan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sierra Bancorp and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Sierra Bancorp 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 Sierra Bancorp are associated (or correlated) with JPMorgan Chase. 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 has no effect on the direction of Sierra Bancorp i.e., Sierra Bancorp and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Sierra Bancorp and JPMorgan Chase
Given the investment horizon of 90 days Sierra Bancorp is expected to generate 1.87 times more return on investment than JPMorgan Chase. However, Sierra Bancorp is 1.87 times more volatile than JPMorgan Chase Co. It trades about 0.08 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.11 per unit of risk. If you would invest 1,748 in Sierra Bancorp on September 12, 2024 and sell it today you would earn a total of 1,366 from holding Sierra Bancorp or generate 78.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sierra Bancorp vs. JPMorgan Chase Co
Performance |
| Timeline |
| Sierra Bancorp |
| JPMorgan Chase |
Sierra Bancorp and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sierra Bancorp and JPMorgan Chase
The main advantage of trading using opposite Sierra Bancorp and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sierra Bancorp position performs unexpectedly, JPMorgan Chase 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 Chase will offset losses from the drop in JPMorgan Chase's long position.| Sierra Bancorp vs. Home Federal Bancorp | Sierra Bancorp vs. First Financial Northwest | Sierra Bancorp vs. First Northwest Bancorp | Sierra Bancorp vs. First Capital |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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