Correlation Between GameStop Corp and JPMORGAN

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Can any of the company-specific risk be diversified away by investing in both GameStop Corp and JPMORGAN 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 GameStop Corp and JPMORGAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and JPMORGAN CHASE CO, you can compare the effects of market volatilities on GameStop Corp and JPMORGAN 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 GameStop Corp with a short position of JPMORGAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and JPMORGAN.

Diversification Opportunities for GameStop Corp and JPMORGAN

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between GameStop and JPMORGAN is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and JPMORGAN CHASE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMORGAN CHASE CO and GameStop Corp 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 GameStop Corp are associated (or correlated) with JPMORGAN. 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 CO has no effect on the direction of GameStop Corp i.e., GameStop Corp and JPMORGAN go up and down completely randomly.

Pair Corralation between GameStop Corp and JPMORGAN

Considering the 90-day investment horizon GameStop Corp is expected to generate 5.12 times more return on investment than JPMORGAN. However, GameStop Corp is 5.12 times more volatile than JPMORGAN CHASE CO. It trades about 0.04 of its potential returns per unit of risk. JPMORGAN CHASE CO is currently generating about 0.01 per unit of risk. If you would invest  1,981  in GameStop Corp on September 12, 2024 and sell it today you would earn a total of  985.00  from holding GameStop Corp or generate 49.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.17%
ValuesDaily Returns

GameStop Corp  vs.  JPMORGAN CHASE CO

 Performance 
       Timeline  
GameStop Corp 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent primary indicators, GameStop Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.
JPMORGAN CHASE CO 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days JPMORGAN CHASE CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, JPMORGAN is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

GameStop Corp and JPMORGAN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GameStop Corp and JPMORGAN

The main advantage of trading using opposite GameStop Corp and JPMORGAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp position performs unexpectedly, JPMORGAN 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 will offset losses from the drop in JPMORGAN's long position.
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The idea behind GameStop Corp 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.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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