Correlation Between JPMorgan Chase and SP Funds
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and SP Funds 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 SP Funds 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 SP Funds Dow, you can compare the effects of market volatilities on JPMorgan Chase and SP Funds 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 SP Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and SP Funds.
Diversification Opportunities for JPMorgan Chase and SP Funds
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JPMorgan and SPSK is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and SP Funds Dow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Funds Dow 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 SP Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Funds Dow has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and SP Funds go up and down completely randomly.
Pair Corralation between JPMorgan Chase and SP Funds
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 3.56 times more return on investment than SP Funds. However, JPMorgan Chase is 3.56 times more volatile than SP Funds Dow. It trades about 0.11 of its potential returns per unit of risk. SP Funds Dow is currently generating about 0.05 per unit of risk. If you would invest 19,719 in JPMorgan Chase Co on August 24, 2024 and sell it today you would earn a total of 4,757 from holding JPMorgan Chase Co or generate 24.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. SP Funds Dow
Performance |
| Timeline |
| JPMorgan Chase |
| SP Funds Dow |
JPMorgan Chase and SP Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and SP Funds
The main advantage of trading using opposite JPMorgan Chase and SP Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, SP Funds 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 SP Funds will offset losses from the drop in SP Funds' long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
| SP Funds vs. Invesco Fundamental Investment | SP Funds vs. iShares International High | SP Funds vs. VanEck International High |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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