Correlation Between JPMorgan Chase and Avantis Emerging
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Avantis Emerging 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 Avantis Emerging 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 Avantis Emerging Markets, you can compare the effects of market volatilities on JPMorgan Chase and Avantis Emerging 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 Avantis Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Avantis Emerging.
Diversification Opportunities for JPMorgan Chase and Avantis Emerging
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JPMorgan and Avantis is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Avantis Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Emerging Markets 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 Avantis Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Emerging Markets has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Avantis Emerging go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Avantis Emerging
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 2.65 times more return on investment than Avantis Emerging. However, JPMorgan Chase is 2.65 times more volatile than Avantis Emerging Markets. It trades about 0.19 of its potential returns per unit of risk. Avantis Emerging Markets is currently generating about -0.1 per unit of risk. If you would invest 22,441 in JPMorgan Chase Co on August 31, 2024 and sell it today you would earn a total of 2,538 from holding JPMorgan Chase Co or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Avantis Emerging Markets
Performance |
| Timeline |
| JPMorgan Chase |
| Avantis Emerging Markets |
JPMorgan Chase and Avantis Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Avantis Emerging
The main advantage of trading using opposite JPMorgan Chase and Avantis Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Avantis Emerging 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 Avantis Emerging will offset losses from the drop in Avantis Emerging's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
| Avantis Emerging vs. Avantis International Small | Avantis Emerging vs. Avantis Small Cap | Avantis Emerging vs. Avantis Emerging Markets | Avantis Emerging vs. American Century ETF |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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