Correlation Between JPMorgan Chase and SPDR SP
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and SPDR SP 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 SPDR SP 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 SPDR SP 600, you can compare the effects of market volatilities on JPMorgan Chase and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and SPDR SP.
Diversification Opportunities for JPMorgan Chase and SPDR SP
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMorgan and SPDR is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and SPDR SP 600 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 600 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 600 has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and SPDR SP go up and down completely randomly.
Pair Corralation between JPMorgan Chase and SPDR SP
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 1.26 times more return on investment than SPDR SP. However, JPMorgan Chase is 1.26 times more volatile than SPDR SP 600. It trades about 0.11 of its potential returns per unit of risk. SPDR SP 600 is currently generating about 0.07 per unit of risk. If you would invest 18,284 in JPMorgan Chase Co on August 27, 2024 and sell it today you would earn a total of 6,571 from holding JPMorgan Chase Co or generate 35.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. SPDR SP 600
Performance |
| Timeline |
| JPMorgan Chase |
| SPDR SP 600 |
JPMorgan Chase and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and SPDR SP
The main advantage of trading using opposite JPMorgan Chase and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Bank of Montreal |
| SPDR SP vs. Dimensional ETF Trust | SPDR SP vs. Vanguard Small Cap Index | SPDR SP vs. First Trust Multi Manager | SPDR SP vs. Vanguard SP Small Cap |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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