Correlation Between JPMorgan Chase and SEI Exchange
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and SEI Exchange 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 SEI Exchange 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 SEI Exchange Traded, you can compare the effects of market volatilities on JPMorgan Chase and SEI Exchange 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 SEI Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and SEI Exchange.
Diversification Opportunities for JPMorgan Chase and SEI Exchange
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and SEI is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and SEI Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Exchange Traded 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 SEI Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Exchange Traded has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and SEI Exchange go up and down completely randomly.
Pair Corralation between JPMorgan Chase and SEI Exchange
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 3.18 times more return on investment than SEI Exchange. However, JPMorgan Chase is 3.18 times more volatile than SEI Exchange Traded. It trades about 0.21 of its potential returns per unit of risk. SEI Exchange Traded is currently generating about 0.3 per unit of risk. If you would invest 22,192 in JPMorgan Chase Co on September 1, 2024 and sell it today you would earn a total of 2,780 from holding JPMorgan Chase Co or generate 12.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
JPMorgan Chase Co vs. SEI Exchange Traded
Performance |
| Timeline |
| JPMorgan Chase |
| SEI Exchange Traded |
JPMorgan Chase and SEI Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and SEI Exchange
The main advantage of trading using opposite JPMorgan Chase and SEI Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, SEI Exchange 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 SEI Exchange will offset losses from the drop in SEI Exchange's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Bank of Montreal |
| SEI Exchange vs. iShares Core SP | SEI Exchange vs. iShares Core MSCI | SEI Exchange vs. iShares Broad USD | SEI Exchange vs. iShares Core SP |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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