Correlation Between JPMorgan Chase and L Catterton
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and L Catterton 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 L Catterton 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 L Catterton Asia, you can compare the effects of market volatilities on JPMorgan Chase and L Catterton 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 L Catterton. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and L Catterton.
Diversification Opportunities for JPMorgan Chase and L Catterton
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and LCAA is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and L Catterton Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Catterton Asia 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 L Catterton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Catterton Asia has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and L Catterton go up and down completely randomly.
Pair Corralation between JPMorgan Chase and L Catterton
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 6.56 times more return on investment than L Catterton. However, JPMorgan Chase is 6.56 times more volatile than L Catterton Asia. It trades about 0.11 of its potential returns per unit of risk. L Catterton Asia is currently generating about 0.14 per unit of risk. If you would invest 12,602 in JPMorgan Chase Co on August 29, 2024 and sell it today you would earn a total of 12,377 from holding JPMorgan Chase Co or generate 98.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 31.45% |
| Values | Daily Returns |
JPMorgan Chase Co vs. L Catterton Asia
Performance |
| Timeline |
| JPMorgan Chase |
| L Catterton Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JPMorgan Chase and L Catterton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and L Catterton
The main advantage of trading using opposite JPMorgan Chase and L Catterton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, L Catterton 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 L Catterton will offset losses from the drop in L Catterton's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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