Correlation Between JPMorgan Chase and Axos Financial
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Axos Financial 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 Axos Financial 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 Axos Financial, you can compare the effects of market volatilities on JPMorgan Chase and Axos Financial 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 Axos Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Axos Financial.
Diversification Opportunities for JPMorgan Chase and Axos Financial
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPMorgan and Axos is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Axos Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axos Financial 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 Axos Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axos Financial has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Axos Financial go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Axos Financial
Considering the 90-day investment horizon JPMorgan Chase is expected to generate 1.58 times less return on investment than Axos Financial. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.63 times less risky than Axos Financial. It trades about 0.11 of its potential returns per unit of risk. Axos Financial is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,815 in Axos Financial on September 3, 2024 and sell it today you would earn a total of 1,470 from holding Axos Financial or generate 21.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Axos Financial
Performance |
| Timeline |
| JPMorgan Chase |
| Axos Financial |
JPMorgan Chase and Axos Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Axos Financial
The main advantage of trading using opposite JPMorgan Chase and Axos Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Axos Financial 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 Axos Financial will offset losses from the drop in Axos Financial's long position.| JPMorgan Chase vs. Partner Communications | JPMorgan Chase vs. Merck Company | JPMorgan Chase vs. Western Midstream Partners | JPMorgan Chase vs. Edgewise Therapeutics |
| Axos Financial vs. JPMorgan Chase Co | Axos Financial vs. Citigroup | Axos Financial vs. Wells Fargo | Axos Financial vs. Toronto Dominion Bank |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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