Correlation Between JPMorgan Chase and Aozora Bank
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Aozora Bank 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 JPMorgan Chase and Aozora Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Chase Co and Aozora Bank, you can compare the effects of market volatilities on JPMorgan Chase and Aozora Bank 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 JPMorgan Chase with a short position of Aozora Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Aozora Bank.
Diversification Opportunities for JPMorgan Chase and Aozora Bank
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JPMorgan and Aozora is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Aozora Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank and JPMorgan Chase 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 JPMorgan Chase Co are associated (or correlated) with Aozora Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aozora Bank has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Aozora Bank go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Aozora Bank
Assuming the 90 days horizon JPMorgan Chase Co is expected to generate 0.64 times more return on investment than Aozora Bank. However, JPMorgan Chase Co is 1.56 times less risky than Aozora Bank. It trades about 0.1 of its potential returns per unit of risk. Aozora Bank is currently generating about 0.0 per unit of risk. If you would invest 12,039 in JPMorgan Chase Co on September 3, 2024 and sell it today you would earn a total of 11,636 from holding JPMorgan Chase Co or generate 96.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Aozora Bank
Performance |
| Timeline |
| JPMorgan Chase |
| Aozora Bank |
JPMorgan Chase and Aozora Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Aozora Bank
The main advantage of trading using opposite JPMorgan Chase and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Aozora Bank 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 Aozora Bank will offset losses from the drop in Aozora Bank's long position.| JPMorgan Chase vs. HSBC Holdings plc | JPMorgan Chase vs. Bank of China | JPMorgan Chase vs. Commonwealth Bank of |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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