Correlation Between JPMorgan Chase and KeyCorp
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and KeyCorp 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 KeyCorp 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 KeyCorp, you can compare the effects of market volatilities on JPMorgan Chase and KeyCorp 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 KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and KeyCorp.
Diversification Opportunities for JPMorgan Chase and KeyCorp
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between JPMorgan and KeyCorp is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and KeyCorp go up and down completely randomly.
Pair Corralation between JPMorgan Chase and KeyCorp
Assuming the 90 days trading horizon JPMorgan Chase is expected to generate 5.86 times less return on investment than KeyCorp. But when comparing it to its historical volatility, JPMorgan Chase Co is 2.06 times less risky than KeyCorp. It trades about 0.03 of its potential returns per unit of risk. KeyCorp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,306 in KeyCorp on August 26, 2024 and sell it today you would earn a total of 1,008 from holding KeyCorp or generate 77.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. KeyCorp
Performance |
| Timeline |
| JPMorgan Chase |
| KeyCorp |
JPMorgan Chase and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and KeyCorp
The main advantage of trading using opposite JPMorgan Chase and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, KeyCorp 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 KeyCorp will offset losses from the drop in KeyCorp's long position.| JPMorgan Chase vs. JPMorgan Chase Co | JPMorgan Chase vs. JPMorgan Chase Co | JPMorgan Chase vs. Bank of America | JPMorgan Chase vs. Wells Fargo |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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