Correlation Between JPMorgan Chase and Green Thumb
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Green Thumb 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 Green Thumb 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 Green Thumb Industries, you can compare the effects of market volatilities on JPMorgan Chase and Green Thumb 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 Green Thumb. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Green Thumb.
Diversification Opportunities for JPMorgan Chase and Green Thumb
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMorgan and Green is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Green Thumb Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Thumb Industries 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 Green Thumb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Thumb Industries has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Green Thumb go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Green Thumb
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 1.07 times more return on investment than Green Thumb. However, JPMorgan Chase is 1.07 times more volatile than Green Thumb Industries. It trades about 0.05 of its potential returns per unit of risk. Green Thumb Industries is currently generating about -0.31 per unit of risk. If you would invest 23,102 in JPMorgan Chase Co on January 13, 2025 and sell it today you would earn a total of 518.00 from holding JPMorgan Chase Co or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Green Thumb Industries
Performance |
| Timeline |
| JPMorgan Chase |
| Green Thumb Industries |
JPMorgan Chase and Green Thumb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Green Thumb
The main advantage of trading using opposite JPMorgan Chase and Green Thumb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Green Thumb 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 Green Thumb will offset losses from the drop in Green Thumb's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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