Correlation Between JPMorgan Chase and Meituan ADR
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Meituan ADR 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 Meituan ADR 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 Meituan ADR, you can compare the effects of market volatilities on JPMorgan Chase and Meituan ADR 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 Meituan ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Meituan ADR.
Diversification Opportunities for JPMorgan Chase and Meituan ADR
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JPMorgan and Meituan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Meituan ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meituan ADR 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 Meituan ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meituan ADR has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Meituan ADR go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Meituan ADR
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.41 times more return on investment than Meituan ADR. However, JPMorgan Chase Co is 2.45 times less risky than Meituan ADR. It trades about 0.11 of its potential returns per unit of risk. Meituan ADR is currently generating about 0.02 per unit of risk. If you would invest 13,551 in JPMorgan Chase Co on November 2, 2024 and sell it today you would earn a total of 13,320 from holding JPMorgan Chase Co or generate 98.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Meituan ADR
Performance |
| Timeline |
| JPMorgan Chase |
| Meituan ADR |
JPMorgan Chase and Meituan ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Meituan ADR
The main advantage of trading using opposite JPMorgan Chase and Meituan ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Meituan ADR 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 Meituan ADR will offset losses from the drop in Meituan ADR's long position.| JPMorgan Chase vs. ProShares Russell Dividend | JPMorgan Chase vs. United Rentals | JPMorgan Chase vs. Kforce Inc | JPMorgan Chase vs. The Ensign Group |
| Meituan ADR vs. Jd Com Inc | Meituan ADR vs. MOGU Inc | Meituan ADR vs. Oriental Culture Holding | Meituan ADR vs. Alibaba Group Holding |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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