Correlation Between Citigroup and Jpmorgan Trust
Can any of the company-specific risk be diversified away by investing in both Citigroup and Jpmorgan Trust 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 Jpmorgan Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Jpmorgan Trust I, you can compare the effects of market volatilities on Citigroup and Jpmorgan Trust 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 Jpmorgan Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Jpmorgan Trust.
Diversification Opportunities for Citigroup and Jpmorgan Trust
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Jpmorgan is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Jpmorgan Trust I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Trust I 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 Jpmorgan Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Trust I has no effect on the direction of Citigroup i.e., Citigroup and Jpmorgan Trust go up and down completely randomly.
Pair Corralation between Citigroup and Jpmorgan Trust
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.17 times less return on investment than Jpmorgan Trust. But when comparing it to its historical volatility, Citigroup is 12.31 times less risky than Jpmorgan Trust. It trades about 0.07 of its potential returns per unit of risk. Jpmorgan Trust I is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 91.00 in Jpmorgan Trust I on August 29, 2024 and sell it today you would earn a total of 9.00 from holding Jpmorgan Trust I or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Citigroup vs. Jpmorgan Trust I
Performance |
| Timeline |
| Citigroup |
| Jpmorgan Trust I |
Citigroup and Jpmorgan Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Jpmorgan Trust
The main advantage of trading using opposite Citigroup and Jpmorgan Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Jpmorgan Trust 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 Trust will offset losses from the drop in Jpmorgan Trust's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Jpmorgan Trust vs. Vanguard Total Stock | Jpmorgan Trust vs. Vanguard 500 Index | Jpmorgan Trust vs. Vanguard Total Stock | Jpmorgan Trust vs. Vanguard Total Stock |
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 Stocks Directory module to find actively traded stocks across global markets.
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