Correlation Between GM and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and JPMorgan Chase Co, you can compare the effects of market volatilities on GM 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 GM with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and JPMorgan Chase.
Diversification Opportunities for GM and JPMorgan Chase
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GM and JPMorgan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and GM 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 General Motors 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 GM i.e., GM and JPMorgan Chase go up and down completely randomly.
Pair Corralation between GM and JPMorgan Chase
Allowing for the 90-day total investment horizon GM is expected to generate 3.12 times less return on investment than JPMorgan Chase. In addition to that, GM is 1.02 times more volatile than JPMorgan Chase Co. It trades about 0.07 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.24 per unit of volatility. If you would invest 20,735 in JPMorgan Chase Co on August 29, 2024 and sell it today you would earn a total of 3,090 from holding JPMorgan Chase Co or generate 14.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. JPMorgan Chase Co
Performance |
| Timeline |
| General Motors |
| JPMorgan Chase |
GM and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and JPMorgan Chase
The main advantage of trading using opposite GM and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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.The idea behind General Motors and JPMorgan Chase Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| JPMorgan Chase vs. China Communications Services | JPMorgan Chase vs. SBI Insurance Group | JPMorgan Chase vs. Reinsurance Group of | JPMorgan Chase vs. Chunghwa Telecom Co |
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.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |