Correlation Between JPMorgan Chase and Colonial Coal
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Colonial Coal 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 Colonial Coal 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 Colonial Coal International, you can compare the effects of market volatilities on JPMorgan Chase and Colonial Coal 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 Colonial Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Colonial Coal.
Diversification Opportunities for JPMorgan Chase and Colonial Coal
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JPMorgan and Colonial is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Colonial Coal International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colonial Coal Intern 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 Colonial Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colonial Coal Intern has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Colonial Coal go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Colonial Coal
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.49 times more return on investment than Colonial Coal. However, JPMorgan Chase Co is 2.03 times less risky than Colonial Coal. It trades about 0.17 of its potential returns per unit of risk. Colonial Coal International is currently generating about -0.13 per unit of risk. If you would invest 19,272 in JPMorgan Chase Co on November 3, 2024 and sell it today you would earn a total of 7,458 from holding JPMorgan Chase Co or generate 38.7% 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. Colonial Coal International
Performance |
| Timeline |
| JPMorgan Chase |
| Colonial Coal Intern |
JPMorgan Chase and Colonial Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Colonial Coal
The main advantage of trading using opposite JPMorgan Chase and Colonial Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Colonial Coal 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 Colonial Coal will offset losses from the drop in Colonial Coal's long position.| JPMorgan Chase vs. ProShares Russell Dividend | JPMorgan Chase vs. United Rentals | JPMorgan Chase vs. Kforce Inc | JPMorgan Chase vs. The Ensign Group |
| Colonial Coal vs. Coronado Global Resources | Colonial Coal vs. Alpha Metallurgical Resources | Colonial Coal vs. Warrior Met Coal | Colonial Coal vs. Ramaco Resources |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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