Correlation Between JPMorgan Chase and Nissan
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Nissan 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 Nissan 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 Nissan Motor Co, you can compare the effects of market volatilities on JPMorgan Chase and Nissan 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 Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Nissan.
Diversification Opportunities for JPMorgan Chase and Nissan
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMorgan and Nissan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Nissan Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nissan Motor 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 Nissan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nissan Motor has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Nissan go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Nissan
Considering the 90-day investment horizon JPMorgan Chase is expected to generate 1.14 times less return on investment than Nissan. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.24 times less risky than Nissan. It trades about 0.11 of its potential returns per unit of risk. Nissan Motor Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 680.00 in Nissan Motor Co on August 28, 2024 and sell it today you would earn a total of 188.00 from holding Nissan Motor Co or generate 27.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.52% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Nissan Motor Co
Performance |
| Timeline |
| JPMorgan Chase |
| Nissan Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JPMorgan Chase and Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Nissan
The main advantage of trading using opposite JPMorgan Chase and Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Nissan 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 Nissan will offset losses from the drop in Nissan's long position.| JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Bank of Montreal | JPMorgan Chase vs. Bank of Nova |
| Nissan vs. Honda Motor Co | Nissan vs. Toyota Motor | Nissan vs. Hyundai Motor Co | Nissan vs. Bayerische Motoren Werke |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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