Correlation Between JPMorgan Chase and Emerson Electric
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Emerson Electric 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 Emerson Electric 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 Emerson Electric, you can compare the effects of market volatilities on JPMorgan Chase and Emerson Electric 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 Emerson Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Emerson Electric.
Diversification Opportunities for JPMorgan Chase and Emerson Electric
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPMorgan and Emerson is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Emerson Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Electric 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 Emerson Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Electric has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Emerson Electric go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Emerson Electric
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.86 times more return on investment than Emerson Electric. However, JPMorgan Chase Co is 1.16 times less risky than Emerson Electric. It trades about 0.08 of its potential returns per unit of risk. Emerson Electric is currently generating about 0.02 per unit of risk. If you would invest 23,929 in JPMorgan Chase Co on September 12, 2024 and sell it today you would earn a total of 357.00 from holding JPMorgan Chase Co or generate 1.49% 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. Emerson Electric
Performance |
| Timeline |
| JPMorgan Chase |
| Emerson Electric |
JPMorgan Chase and Emerson Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Emerson Electric
The main advantage of trading using opposite JPMorgan Chase and Emerson Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Emerson Electric 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 Emerson Electric will offset losses from the drop in Emerson Electric's long position.| JPMorgan Chase vs. Bank of America | JPMorgan Chase vs. Victory Integrity Smallmid Cap | JPMorgan Chase vs. Hilton Worldwide Holdings | JPMorgan Chase vs. NVIDIA |
| Emerson Electric vs. Victory Integrity Smallmid Cap | Emerson Electric vs. Hilton Worldwide Holdings | Emerson Electric vs. NVIDIA | Emerson Electric vs. JPMorgan Chase Co |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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