Correlation Between JPMorgan Chase and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Wesdome Gold 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 Wesdome Gold 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 Wesdome Gold Mines, you can compare the effects of market volatilities on JPMorgan Chase and Wesdome Gold 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 Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Wesdome Gold.
Diversification Opportunities for JPMorgan Chase and Wesdome Gold
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JPMorgan and Wesdome is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Wesdome Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesdome Gold Mines 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 Wesdome Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesdome Gold Mines has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Wesdome Gold go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Wesdome Gold
Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 1.05 times more return on investment than Wesdome Gold. However, JPMorgan Chase is 1.05 times more volatile than Wesdome Gold Mines. It trades about 0.18 of its potential returns per unit of risk. Wesdome Gold Mines is currently generating about -0.04 per unit of risk. If you would invest 3,000 in JPMorgan Chase Co on August 29, 2024 and sell it today you would earn a total of 331.00 from holding JPMorgan Chase Co or generate 11.03% 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. Wesdome Gold Mines
Performance |
| Timeline |
| JPMorgan Chase |
| Wesdome Gold Mines |
JPMorgan Chase and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Wesdome Gold
The main advantage of trading using opposite JPMorgan Chase and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Wesdome Gold 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 Wesdome Gold will offset losses from the drop in Wesdome Gold's long position.| JPMorgan Chase vs. Knight Therapeutics | JPMorgan Chase vs. DIRTT Environmental Solutions | JPMorgan Chase vs. Parkland Fuel | JPMorgan Chase vs. Pason Systems |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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