Correlation Between JPMorgan Chase and Uniteds
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Uniteds 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 Uniteds 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 Uniteds Limited, you can compare the effects of market volatilities on JPMorgan Chase and Uniteds 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 Uniteds. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Uniteds.
Diversification Opportunities for JPMorgan Chase and Uniteds
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and Uniteds is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Uniteds Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniteds Limited 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 Uniteds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniteds Limited has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Uniteds go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Uniteds
Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 4.51 times more return on investment than Uniteds. However, JPMorgan Chase is 4.51 times more volatile than Uniteds Limited. It trades about 0.21 of its potential returns per unit of risk. Uniteds Limited is currently generating about 0.24 per unit of risk. If you would invest 2,959 in JPMorgan Chase Co on September 1, 2024 and sell it today you would earn a total of 385.00 from holding JPMorgan Chase Co or generate 13.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Uniteds Limited
Performance |
| Timeline |
| JPMorgan Chase |
| Uniteds Limited |
JPMorgan Chase and Uniteds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Uniteds
The main advantage of trading using opposite JPMorgan Chase and Uniteds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Uniteds 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 Uniteds will offset losses from the drop in Uniteds' long position.| JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Royal Bank of | JPMorgan Chase vs. Bank of Montreal | JPMorgan Chase vs. Canadian Imperial Bank |
| Uniteds vs. Economic Investment Trust | Uniteds vs. Canadian General Investments | Uniteds vs. E L Financial Corp | Uniteds vs. Clairvest Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |