Correlation Between JPMorgan Chase and Olympia Financial
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Olympia 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 Olympia 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 Olympia Financial Group, you can compare the effects of market volatilities on JPMorgan Chase and Olympia 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 Olympia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Olympia Financial.
Diversification Opportunities for JPMorgan Chase and Olympia Financial
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JPMorgan and Olympia is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Olympia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympia Financial 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 Olympia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympia Financial has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Olympia Financial go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Olympia Financial
Assuming the 90 days trading horizon JPMorgan Chase is expected to generate 1.78 times less return on investment than Olympia Financial. In addition to that, JPMorgan Chase is 1.66 times more volatile than Olympia Financial Group. It trades about 0.07 of its total potential returns per unit of risk. Olympia Financial Group is currently generating about 0.21 per unit of volatility. If you would invest 9,458 in Olympia Financial Group on September 23, 2024 and sell it today you would earn a total of 1,192 from holding Olympia Financial Group or generate 12.6% 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. Olympia Financial Group
Performance |
| Timeline |
| JPMorgan Chase |
| Olympia Financial |
JPMorgan Chase and Olympia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Olympia Financial
The main advantage of trading using opposite JPMorgan Chase and Olympia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Olympia 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 Olympia Financial will offset losses from the drop in Olympia Financial's long position.| JPMorgan Chase vs. VersaBank | JPMorgan Chase vs. Hemisphere Energy | JPMorgan Chase vs. North American Financial | JPMorgan Chase vs. Wall Financial |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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