Correlation Between JPMorgan Chase and Alamo
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Alamo 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 Alamo 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 Alamo Group, you can compare the effects of market volatilities on JPMorgan Chase and Alamo 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 Alamo. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Alamo.
Diversification Opportunities for JPMorgan Chase and Alamo
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and Alamo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Alamo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamo Group 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 Alamo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamo Group has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Alamo go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Alamo
Considering the 90-day investment horizon JPMorgan Chase is expected to generate 1.02 times less return on investment than Alamo. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.09 times less risky than Alamo. It trades about 0.11 of its potential returns per unit of risk. Alamo Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 17,856 in Alamo Group on September 13, 2024 and sell it today you would earn a total of 1,678 from holding Alamo Group or generate 9.4% 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. Alamo Group
Performance |
| Timeline |
| JPMorgan Chase |
| Alamo Group |
JPMorgan Chase and Alamo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Alamo
The main advantage of trading using opposite JPMorgan Chase and Alamo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Alamo 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 Alamo will offset losses from the drop in Alamo's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Canadian Imperial Bank |
| Alamo vs. Hyster Yale Materials Handling | Alamo vs. Columbus McKinnon | Alamo vs. AGCO Corporation | Alamo vs. Titan International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |