Correlation Between JPMorgan Chase and First Bancorp
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and First Bancorp 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 First Bancorp 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 First Bancorp, you can compare the effects of market volatilities on JPMorgan Chase and First Bancorp 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 First Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and First Bancorp.
Diversification Opportunities for JPMorgan Chase and First Bancorp
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and First is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancorp 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 First Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and First Bancorp go up and down completely randomly.
Pair Corralation between JPMorgan Chase and First Bancorp
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.6 times more return on investment than First Bancorp. However, JPMorgan Chase Co is 1.66 times less risky than First Bancorp. It trades about 0.08 of its potential returns per unit of risk. First Bancorp is currently generating about -0.12 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. First Bancorp
Performance |
| Timeline |
| JPMorgan Chase |
| First Bancorp |
JPMorgan Chase and First Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and First Bancorp
The main advantage of trading using opposite JPMorgan Chase and First Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, First Bancorp 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 First Bancorp will offset losses from the drop in First Bancorp'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 |
| First Bancorp vs. JPMorgan Chase Co | First Bancorp vs. Citigroup | First Bancorp vs. Wells Fargo | First Bancorp vs. Toronto Dominion Bank |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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