Correlation Between JPMorgan Chase and Western Union
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Western Union 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 Western Union 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 The Western Union, you can compare the effects of market volatilities on JPMorgan Chase and Western Union 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 Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Western Union.
Diversification Opportunities for JPMorgan Chase and Western Union
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JPMorgan and Western is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and The Western Union in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union 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 Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Western Union go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Western Union
Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 31.55 times more return on investment than Western Union. However, JPMorgan Chase is 31.55 times more volatile than The Western Union. It trades about 0.2 of its potential returns per unit of risk. The Western Union is currently generating about 0.21 per unit of risk. If you would invest 451,757 in JPMorgan Chase Co on August 31, 2024 and sell it today you would earn a total of 60,297 from holding JPMorgan Chase Co or generate 13.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. The Western Union
Performance |
| Timeline |
| JPMorgan Chase |
| Western Union |
JPMorgan Chase and Western Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Western Union
The main advantage of trading using opposite JPMorgan Chase and Western Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Western Union 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 Western Union will offset losses from the drop in Western Union's long position.| JPMorgan Chase vs. Bank of America | JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Banco Bilbao Vizcaya |
| Western Union vs. FibraHotel | Western Union vs. UnitedHealth Group Incorporated | Western Union vs. Hoteles City Express | Western Union vs. Grupo Sports World |
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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