Correlation Between JPMorgan Chase and Intact Financial
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Intact 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 Intact 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 Intact Financial Corp, you can compare the effects of market volatilities on JPMorgan Chase and Intact 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 Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Intact Financial.
Diversification Opportunities for JPMorgan Chase and Intact Financial
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JPMorgan and Intact is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Intact Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial Corp 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 Intact Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intact Financial Corp has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Intact Financial go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Intact Financial
Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 1.52 times more return on investment than Intact Financial. However, JPMorgan Chase is 1.52 times more volatile than Intact Financial Corp. It trades about 0.1 of its potential returns per unit of risk. Intact Financial Corp is currently generating about 0.08 per unit of risk. If you would invest 1,734 in JPMorgan Chase Co on September 4, 2024 and sell it today you would earn a total of 1,544 from holding JPMorgan Chase Co or generate 89.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Intact Financial Corp
Performance |
| Timeline |
| JPMorgan Chase |
| Intact Financial Corp |
JPMorgan Chase and Intact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Intact Financial
The main advantage of trading using opposite JPMorgan Chase and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Intact 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 Intact Financial will offset losses from the drop in Intact Financial's long position.| JPMorgan Chase vs. Data Communications Management | JPMorgan Chase vs. Partners Value Investments | JPMorgan Chase vs. CVS HEALTH CDR | JPMorgan Chase vs. 2028 Investment Grade |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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