Correlation Between Citigroup and JP Morgan
Can any of the company-specific risk be diversified away by investing in both Citigroup and JP Morgan 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 Citigroup and JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and JP Morgan Exchange Traded, you can compare the effects of market volatilities on Citigroup and JP Morgan 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 Citigroup with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and JP Morgan.
Diversification Opportunities for Citigroup and JP Morgan
Significant diversification
The 3 months correlation between Citigroup and JADE is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and JP Morgan Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Exchange and Citigroup 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 Citigroup are associated (or correlated) with JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Exchange has no effect on the direction of Citigroup i.e., Citigroup and JP Morgan go up and down completely randomly.
Pair Corralation between Citigroup and JP Morgan
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.11 times more return on investment than JP Morgan. However, Citigroup is 2.11 times more volatile than JP Morgan Exchange Traded. It trades about 0.14 of its potential returns per unit of risk. JP Morgan Exchange Traded is currently generating about -0.09 per unit of risk. If you would invest 6,205 in Citigroup on August 29, 2024 and sell it today you would earn a total of 770.00 from holding Citigroup or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. JP Morgan Exchange Traded
Performance |
| Timeline |
| Citigroup |
| JP Morgan Exchange |
Citigroup and JP Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and JP Morgan
The main advantage of trading using opposite Citigroup and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, JP Morgan 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 JP Morgan will offset losses from the drop in JP Morgan's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| JP Morgan vs. Freedom Day Dividend | JP Morgan vs. Franklin Templeton ETF | JP Morgan vs. iShares MSCI China | JP Morgan vs. Tidal Trust II |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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