Correlation Between JPMorgan Chase and Airtel Africa
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Airtel Africa 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 Airtel Africa 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 Airtel Africa Plc, you can compare the effects of market volatilities on JPMorgan Chase and Airtel Africa 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 Airtel Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Airtel Africa.
Diversification Opportunities for JPMorgan Chase and Airtel Africa
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JPMorgan and Airtel is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Airtel Africa Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airtel Africa Plc 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 Airtel Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airtel Africa Plc has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Airtel Africa go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Airtel Africa
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.58 times more return on investment than Airtel Africa. However, JPMorgan Chase Co is 1.74 times less risky than Airtel Africa. It trades about 0.18 of its potential returns per unit of risk. Airtel Africa Plc is currently generating about -0.12 per unit of risk. If you would invest 22,550 in JPMorgan Chase Co on August 29, 2024 and sell it today you would earn a total of 2,432 from holding JPMorgan Chase Co or generate 10.78% 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. Airtel Africa Plc
Performance |
| Timeline |
| JPMorgan Chase |
| Airtel Africa Plc |
JPMorgan Chase and Airtel Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Airtel Africa
The main advantage of trading using opposite JPMorgan Chase and Airtel Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Airtel Africa 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 Airtel Africa will offset losses from the drop in Airtel Africa's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
| Airtel Africa vs. BCE Inc | Airtel Africa vs. Axiologix | Airtel Africa vs. Advanced Info Service | Airtel Africa vs. American Nortel Communications |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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