Correlation Between American Hotel and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both American Hotel 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 American Hotel and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Hotel Income and JPMorgan Chase Co, you can compare the effects of market volatilities on American Hotel 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 American Hotel with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and JPMorgan Chase.
Diversification Opportunities for American Hotel and JPMorgan Chase
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and JPMorgan is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and American Hotel 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 American Hotel Income 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 American Hotel i.e., American Hotel and JPMorgan Chase go up and down completely randomly.
Pair Corralation between American Hotel and JPMorgan Chase
Assuming the 90 days trading horizon American Hotel Income is expected to generate 8.56 times more return on investment than JPMorgan Chase. However, American Hotel is 8.56 times more volatile than JPMorgan Chase Co. It trades about 0.15 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about -0.19 per unit of risk. If you would invest 36.00 in American Hotel Income on September 23, 2024 and sell it today you would earn a total of 10.00 from holding American Hotel Income or generate 27.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Hotel Income vs. JPMorgan Chase Co
Performance |
| Timeline |
| American Hotel Income |
| JPMorgan Chase |
American Hotel and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and JPMorgan Chase
The main advantage of trading using opposite American Hotel and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel 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.| American Hotel vs. JPMorgan Chase Co | American Hotel vs. Bank of America | American Hotel vs. Toronto Dominion Bank | American Hotel vs. Royal Bank of |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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