Correlation Between JPMorgan Chase and Home Bancorp
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Home 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 Home 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 Home Bancorp, you can compare the effects of market volatilities on JPMorgan Chase and Home 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 Home Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Home Bancorp.
Diversification Opportunities for JPMorgan Chase and Home Bancorp
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPMorgan and Home is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Home Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home 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 Home Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Bancorp has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Home Bancorp go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Home Bancorp
Considering the 90-day investment horizon JPMorgan Chase is expected to generate 1.4 times less return on investment than Home Bancorp. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.41 times less risky than Home Bancorp. It trades about 0.12 of its potential returns per unit of risk. Home Bancorp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,602 in Home Bancorp on September 12, 2024 and sell it today you would earn a total of 1,349 from holding Home Bancorp or generate 37.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Home Bancorp
Performance |
| Timeline |
| JPMorgan Chase |
| Home Bancorp |
JPMorgan Chase and Home Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Home Bancorp
The main advantage of trading using opposite JPMorgan Chase and Home Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Home 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 Home Bancorp will offset losses from the drop in Home 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 |
| Home Bancorp vs. Home Federal Bancorp | Home Bancorp vs. Community West Bancshares | Home Bancorp vs. First Financial Northwest | Home Bancorp vs. First Capital |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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