Correlation Between JPMorgan Chase and American Eagle
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and American Eagle 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 American Eagle 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 American Eagle Gold, you can compare the effects of market volatilities on JPMorgan Chase and American Eagle 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 American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and American Eagle.
Diversification Opportunities for JPMorgan Chase and American Eagle
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and American is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and American Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Eagle Gold 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 American Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Eagle Gold has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and American Eagle go up and down completely randomly.
Pair Corralation between JPMorgan Chase and American Eagle
Considering the 90-day investment horizon JPMorgan Chase is expected to generate 2.65 times less return on investment than American Eagle. But when comparing it to its historical volatility, JPMorgan Chase Co is 2.26 times less risky than American Eagle. It trades about 0.21 of its potential returns per unit of risk. American Eagle Gold is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 50.00 in American Eagle Gold on September 1, 2024 and sell it today you would earn a total of 17.00 from holding American Eagle Gold or generate 34.0% 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. American Eagle Gold
Performance |
| Timeline |
| JPMorgan Chase |
| American Eagle Gold |
JPMorgan Chase and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and American Eagle
The main advantage of trading using opposite JPMorgan Chase and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, American Eagle 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 American Eagle will offset losses from the drop in American Eagle's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Bank of Montreal |
| American Eagle vs. Minnova Corp | American Eagle vs. Blue Star Gold | American Eagle vs. Advance Gold Corp | American Eagle vs. Argo Gold |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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