Correlation Between JPMorgan Chase and SPDR Galaxy
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and SPDR Galaxy 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 SPDR Galaxy 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 SPDR Galaxy Digital, you can compare the effects of market volatilities on JPMorgan Chase and SPDR Galaxy 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 SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and SPDR Galaxy.
Diversification Opportunities for JPMorgan Chase and SPDR Galaxy
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPMorgan and SPDR is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and SPDR Galaxy Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Galaxy Digital 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 SPDR Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Galaxy Digital has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and SPDR Galaxy go up and down completely randomly.
Pair Corralation between JPMorgan Chase and SPDR Galaxy
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.26 times more return on investment than SPDR Galaxy. However, JPMorgan Chase Co is 3.92 times less risky than SPDR Galaxy. It trades about 0.09 of its potential returns per unit of risk. SPDR Galaxy Digital is currently generating about -0.03 per unit of risk. If you would invest 23,956 in JPMorgan Chase Co on September 13, 2024 and sell it today you would earn a total of 397.00 from holding JPMorgan Chase Co or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
JPMorgan Chase Co vs. SPDR Galaxy Digital
Performance |
| Timeline |
| JPMorgan Chase |
| SPDR Galaxy Digital |
JPMorgan Chase and SPDR Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and SPDR Galaxy
The main advantage of trading using opposite JPMorgan Chase and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, SPDR Galaxy 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 SPDR Galaxy will offset losses from the drop in SPDR Galaxy's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Canadian Imperial Bank |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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