Correlation Between JPMorgan Chase and BCB Bancorp
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and BCB Bancorp 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 BCB Bancorp 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 BCB Bancorp, you can compare the effects of market volatilities on JPMorgan Chase and BCB Bancorp 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 BCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and BCB Bancorp.
Diversification Opportunities for JPMorgan Chase and BCB Bancorp
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and BCB is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp 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 BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and BCB Bancorp go up and down completely randomly.
Pair Corralation between JPMorgan Chase and BCB Bancorp
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.86 times more return on investment than BCB Bancorp. However, JPMorgan Chase Co is 1.16 times less risky than BCB Bancorp. It trades about 0.15 of its potential returns per unit of risk. BCB Bancorp is currently generating about 0.06 per unit of risk. If you would invest 20,534 in JPMorgan Chase Co on September 12, 2024 and sell it today you would earn a total of 3,819 from holding JPMorgan Chase Co or generate 18.6% 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. BCB Bancorp
Performance |
| Timeline |
| JPMorgan Chase |
| BCB Bancorp |
JPMorgan Chase and BCB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and BCB Bancorp
The main advantage of trading using opposite JPMorgan Chase and BCB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, BCB Bancorp 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 BCB Bancorp will offset losses from the drop in BCB Bancorp's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
| BCB Bancorp vs. Provident Financial Services | BCB Bancorp vs. First Mid Illinois | BCB Bancorp vs. ConnectOne Bancorp | BCB Bancorp vs. Finward Bancorp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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