Correlation Between JPMorgan Chase and Lowes Companies
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Lowes Companies 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 Lowes Companies 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 Lowes Companies, you can compare the effects of market volatilities on JPMorgan Chase and Lowes Companies 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 Lowes Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Lowes Companies.
Diversification Opportunities for JPMorgan Chase and Lowes Companies
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JPMorgan and Lowes is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Lowes Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowes Companies 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 Lowes Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowes Companies has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Lowes Companies go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Lowes Companies
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.97 times more return on investment than Lowes Companies. However, JPMorgan Chase Co is 1.03 times less risky than Lowes Companies. It trades about 0.1 of its potential returns per unit of risk. Lowes Companies is currently generating about 0.05 per unit of risk. If you would invest 12,451 in JPMorgan Chase Co on September 13, 2024 and sell it today you would earn a total of 11,702 from holding JPMorgan Chase Co or generate 93.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Lowes Companies
Performance |
| Timeline |
| JPMorgan Chase |
| Lowes Companies |
JPMorgan Chase and Lowes Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Lowes Companies
The main advantage of trading using opposite JPMorgan Chase and Lowes Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Lowes Companies 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 Lowes Companies will offset losses from the drop in Lowes Companies' long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Bank of Montreal |
| Lowes Companies vs. Aquagold International | Lowes Companies vs. Thrivent High Yield | Lowes Companies vs. Morningstar Unconstrained Allocation | Lowes Companies vs. Via Renewables |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |