Correlation Between JPMorgan Chase and Direxion
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Direxion 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 Direxion 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 Direxion, you can compare the effects of market volatilities on JPMorgan Chase and Direxion 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 Direxion. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Direxion.
Diversification Opportunities for JPMorgan Chase and Direxion
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JPMorgan and Direxion is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Direxion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion 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 Direxion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Direxion go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Direxion
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 1.83 times more return on investment than Direxion. However, JPMorgan Chase is 1.83 times more volatile than Direxion. It trades about 0.11 of its potential returns per unit of risk. Direxion is currently generating about -0.01 per unit of risk. If you would invest 12,459 in JPMorgan Chase Co on August 26, 2024 and sell it today you would earn a total of 12,396 from holding JPMorgan Chase Co or generate 99.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 19.32% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Direxion
Performance |
| Timeline |
| JPMorgan Chase |
| Direxion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JPMorgan Chase and Direxion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Direxion
The main advantage of trading using opposite JPMorgan Chase and Direxion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Direxion 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 Direxion will offset losses from the drop in Direxion's long position.| JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Bank of Montreal |
| Direxion vs. Blackrock Muniholdings Ny | Direxion vs. MFS Investment Grade | Direxion vs. Eaton Vance National | Direxion vs. Invesco High Income |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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