Correlation Between JPMorgan Chase and Barclays PLC
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Barclays PLC 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 Barclays PLC 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 Barclays PLC, you can compare the effects of market volatilities on JPMorgan Chase and Barclays PLC 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 Barclays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Barclays PLC.
Diversification Opportunities for JPMorgan Chase and Barclays PLC
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMorgan and Barclays is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Barclays PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays PLC 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 Barclays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays PLC has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Barclays PLC go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Barclays PLC
Assuming the 90 days trading horizon JPMorgan Chase is expected to generate 2.97 times less return on investment than Barclays PLC. But when comparing it to its historical volatility, JPMorgan Chase Co is 3.21 times less risky than Barclays PLC. It trades about 0.26 of its potential returns per unit of risk. Barclays PLC is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 27,000 in Barclays PLC on November 22, 2024 and sell it today you would earn a total of 4,530 from holding Barclays PLC or generate 16.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Barclays PLC
Performance |
| Timeline |
| JPMorgan Chase |
| Barclays PLC |
JPMorgan Chase and Barclays PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Barclays PLC
The main advantage of trading using opposite JPMorgan Chase and Barclays PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Barclays PLC 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 Barclays PLC will offset losses from the drop in Barclays PLC's long position.| JPMorgan Chase vs. GMxico Transportes SAB | JPMorgan Chase vs. Air Transport Services | JPMorgan Chase vs. Capital One Financial | JPMorgan Chase vs. CVS Health |
| Barclays PLC vs. HSBC Holdings plc | Barclays PLC vs. UBS Group AG | Barclays PLC vs. The Bank of | Barclays PLC vs. ING Groep NV |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |