Correlation Between JPMorgan Chase and Digi International
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Digi International 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 Digi International 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 Digi International, you can compare the effects of market volatilities on JPMorgan Chase and Digi International 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 Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Digi International.
Diversification Opportunities for JPMorgan Chase and Digi International
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPMorgan and Digi is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International 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 Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Digi International go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Digi International
Considering the 90-day investment horizon JPMorgan Chase is expected to generate 2.12 times less return on investment than Digi International. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.92 times less risky than Digi International. It trades about 0.06 of its potential returns per unit of risk. Digi International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,262 in Digi International on September 13, 2024 and sell it today you would earn a total of 76.50 from holding Digi International or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Digi International
Performance |
| Timeline |
| JPMorgan Chase |
| Digi International |
JPMorgan Chase and Digi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Digi International
The main advantage of trading using opposite JPMorgan Chase and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Digi International 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 Digi International will offset losses from the drop in Digi International's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Bank of Montreal |
| Digi International vs. Passage Bio | Digi International vs. Black Diamond Therapeutics | Digi International vs. Alector | Digi International vs. Century Therapeutics |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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