Correlation Between JPMorgan Chase and US Financial
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and US Financial 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 US Financial 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 US Financial 15, you can compare the effects of market volatilities on JPMorgan Chase and US Financial 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 US Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and US Financial.
Diversification Opportunities for JPMorgan Chase and US Financial
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPMorgan and FTU-PB is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and US Financial 15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Financial 15 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 US Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Financial 15 has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and US Financial go up and down completely randomly.
Pair Corralation between JPMorgan Chase and US Financial
Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 0.8 times more return on investment than US Financial. However, JPMorgan Chase Co is 1.24 times less risky than US Financial. It trades about 0.1 of its potential returns per unit of risk. US Financial 15 is currently generating about 0.05 per unit of risk. If you would invest 1,746 in JPMorgan Chase Co on September 3, 2024 and sell it today you would earn a total of 1,598 from holding JPMorgan Chase Co or generate 91.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. US Financial 15
Performance |
| Timeline |
| JPMorgan Chase |
| US Financial 15 |
JPMorgan Chase and US Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and US Financial
The main advantage of trading using opposite JPMorgan Chase and US Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, US Financial 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 US Financial will offset losses from the drop in US Financial's long position.| JPMorgan Chase vs. Intact Financial Corp | JPMorgan Chase vs. Primaris Retail RE | JPMorgan Chase vs. Plaza Retail REIT | JPMorgan Chase vs. Financial 15 Split |
| US Financial vs. Apple Inc CDR | US Financial vs. Microsoft Corp CDR | US Financial vs. Amazon CDR | US Financial vs. Alphabet Inc CDR |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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