Correlation Between JPMorgan Chase and Pond Technologies
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Pond Technologies 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 Pond Technologies 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 Pond Technologies Holdings, you can compare the effects of market volatilities on JPMorgan Chase and Pond Technologies 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 Pond Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Pond Technologies.
Diversification Opportunities for JPMorgan Chase and Pond Technologies
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JPMorgan and Pond is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Pond Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pond Technologies 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 Pond Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pond Technologies has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Pond Technologies go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Pond Technologies
Considering the 90-day investment horizon JPMorgan Chase is expected to generate 5.61 times less return on investment than Pond Technologies. But when comparing it to its historical volatility, JPMorgan Chase Co is 11.16 times less risky than Pond Technologies. It trades about 0.1 of its potential returns per unit of risk. Pond Technologies Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5.03 in Pond Technologies Holdings on August 31, 2024 and sell it today you would lose (4.13) from holding Pond Technologies Holdings or give up 82.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Pond Technologies Holdings
Performance |
| Timeline |
| JPMorgan Chase |
| Pond Technologies |
JPMorgan Chase and Pond Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Pond Technologies
The main advantage of trading using opposite JPMorgan Chase and Pond Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Pond Technologies 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 Pond Technologies will offset losses from the drop in Pond Technologies' long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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