Correlation Between JPMorgan Chase and Baxter International
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Baxter International 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 Baxter International 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 Baxter International, you can compare the effects of market volatilities on JPMorgan Chase and Baxter International 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 Baxter International. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Baxter International.
Diversification Opportunities for JPMorgan Chase and Baxter International
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JPMorgan and Baxter is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Baxter International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baxter International 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 Baxter International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baxter International has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Baxter International go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Baxter International
Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 0.68 times more return on investment than Baxter International. However, JPMorgan Chase Co is 1.48 times less risky than Baxter International. It trades about -0.03 of its potential returns per unit of risk. Baxter International is currently generating about -0.23 per unit of risk. If you would invest 493,541 in JPMorgan Chase Co on September 12, 2024 and sell it today you would lose (3,841) from holding JPMorgan Chase Co or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Baxter International
Performance |
| Timeline |
| JPMorgan Chase |
| Baxter International |
JPMorgan Chase and Baxter International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Baxter International
The main advantage of trading using opposite JPMorgan Chase and Baxter International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Baxter International 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 Baxter International will offset losses from the drop in Baxter International's long position.| JPMorgan Chase vs. Verizon Communications | JPMorgan Chase vs. Samsung Electronics Co | JPMorgan Chase vs. Applied Materials | JPMorgan Chase vs. Prudential Financial |
| Baxter International vs. Verizon Communications | Baxter International vs. KB Home | Baxter International vs. Costco Wholesale | Baxter International vs. Grupo Hotelero Santa |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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