Correlation Between JPMorgan Chase and AXT
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and AXT 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 AXT 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 AXT Inc, you can compare the effects of market volatilities on JPMorgan Chase and AXT 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 AXT. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and AXT.
Diversification Opportunities for JPMorgan Chase and AXT
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JPMorgan and AXT is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and AXT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXT Inc 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 AXT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXT Inc has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and AXT go up and down completely randomly.
Pair Corralation between JPMorgan Chase and AXT
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.52 times more return on investment than AXT. However, JPMorgan Chase Co is 1.94 times less risky than AXT. It trades about 0.18 of its potential returns per unit of risk. AXT Inc is currently generating about -0.22 per unit of risk. If you would invest 22,550 in JPMorgan Chase Co on August 27, 2024 and sell it today you would earn a total of 2,305 from holding JPMorgan Chase Co or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. AXT Inc
Performance |
| Timeline |
| JPMorgan Chase |
| AXT Inc |
JPMorgan Chase and AXT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and AXT
The main advantage of trading using opposite JPMorgan Chase and AXT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, AXT 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 AXT will offset losses from the drop in AXT's long position.| JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Bank of Montreal | JPMorgan Chase vs. Bank of Nova |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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