Correlation Between JPMorgan Chase and SGI Enhanced
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and SGI Enhanced 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 SGI Enhanced 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 SGI Enhanced Nasdaq 100, you can compare the effects of market volatilities on JPMorgan Chase and SGI Enhanced 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 SGI Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and SGI Enhanced.
Diversification Opportunities for JPMorgan Chase and SGI Enhanced
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMorgan and SGI is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and SGI Enhanced Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGI Enhanced Nasdaq 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 SGI Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGI Enhanced Nasdaq has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and SGI Enhanced go up and down completely randomly.
Pair Corralation between JPMorgan Chase and SGI Enhanced
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 1.41 times more return on investment than SGI Enhanced. However, JPMorgan Chase is 1.41 times more volatile than SGI Enhanced Nasdaq 100. It trades about 0.11 of its potential returns per unit of risk. SGI Enhanced Nasdaq 100 is currently generating about 0.07 per unit of risk. If you would invest 19,949 in JPMorgan Chase Co on September 1, 2024 and sell it today you would earn a total of 5,023 from holding JPMorgan Chase Co or generate 25.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
JPMorgan Chase Co vs. SGI Enhanced Nasdaq 100
Performance |
| Timeline |
| JPMorgan Chase |
| SGI Enhanced Nasdaq |
JPMorgan Chase and SGI Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and SGI Enhanced
The main advantage of trading using opposite JPMorgan Chase and SGI Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, SGI Enhanced 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 SGI Enhanced will offset losses from the drop in SGI Enhanced's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Bank of Montreal |
| SGI Enhanced vs. Global X SP | SGI Enhanced vs. Amplify CWP Enhanced | SGI Enhanced vs. JPMorgan Equity Premium |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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