Correlation Between Itau Unibanco and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Itau Unibanco 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 Itau Unibanco and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itau Unibanco Banco and JPMorgan Chase Co, you can compare the effects of market volatilities on Itau Unibanco 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 Itau Unibanco with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itau Unibanco and JPMorgan Chase.
Diversification Opportunities for Itau Unibanco and JPMorgan Chase
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Itau and JPMorgan is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Itau Unibanco Banco and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Itau Unibanco 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 Itau Unibanco Banco 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 Itau Unibanco i.e., Itau Unibanco and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Itau Unibanco and JPMorgan Chase
Given the investment horizon of 90 days Itau Unibanco is expected to generate 8.0 times less return on investment than JPMorgan Chase. In addition to that, Itau Unibanco is 1.27 times more volatile than JPMorgan Chase Co. It trades about 0.01 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.11 per unit of volatility. If you would invest 15,139 in JPMorgan Chase Co on September 12, 2024 and sell it today you would earn a total of 9,147 from holding JPMorgan Chase Co or generate 60.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itau Unibanco Banco vs. JPMorgan Chase Co
Performance |
| Timeline |
| Itau Unibanco Banco |
| JPMorgan Chase |
Itau Unibanco and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itau Unibanco and JPMorgan Chase
The main advantage of trading using opposite Itau Unibanco and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itau Unibanco 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.| Itau Unibanco vs. JPMorgan Chase Co | Itau Unibanco vs. Citigroup | Itau Unibanco vs. Wells Fargo | Itau Unibanco vs. Toronto Dominion Bank |
| JPMorgan Chase vs. Bank of America | JPMorgan Chase vs. Victory Integrity Smallmid Cap | JPMorgan Chase vs. Hilton Worldwide Holdings | JPMorgan Chase vs. NVIDIA |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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