Correlation Between JPMorgan Chase and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and BNP Paribas 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 BNP Paribas 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 BNP Paribas SA, you can compare the effects of market volatilities on JPMorgan Chase and BNP Paribas 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 BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and BNP Paribas.
Diversification Opportunities for JPMorgan Chase and BNP Paribas
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JPMorgan and BNP is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA 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 BNP Paribas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP Paribas SA has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and BNP Paribas go up and down completely randomly.
Pair Corralation between JPMorgan Chase and BNP Paribas
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.89 times more return on investment than BNP Paribas. However, JPMorgan Chase Co is 1.12 times less risky than BNP Paribas. It trades about 0.13 of its potential returns per unit of risk. BNP Paribas SA is currently generating about 0.01 per unit of risk. If you would invest 13,551 in JPMorgan Chase Co on August 31, 2024 and sell it today you would earn a total of 11,421 from holding JPMorgan Chase Co or generate 84.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. BNP Paribas SA
Performance |
| Timeline |
| JPMorgan Chase |
| BNP Paribas SA |
JPMorgan Chase and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and BNP Paribas
The main advantage of trading using opposite JPMorgan Chase and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, BNP Paribas 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 BNP Paribas will offset losses from the drop in BNP Paribas' long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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