Correlation Between JPMorgan Chase and 48242WAC0

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Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and 48242WAC0 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 48242WAC0 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 KBR INC 475, you can compare the effects of market volatilities on JPMorgan Chase and 48242WAC0 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 48242WAC0. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and 48242WAC0.

Diversification Opportunities for JPMorgan Chase and 48242WAC0

-0.47
  Correlation Coefficient

Very good diversification

The 3 months correlation between JPMorgan and 48242WAC0 is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and KBR INC 475 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBR INC 475 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 48242WAC0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBR INC 475 has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and 48242WAC0 go up and down completely randomly.

Pair Corralation between JPMorgan Chase and 48242WAC0

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 2.36 times more return on investment than 48242WAC0. However, JPMorgan Chase is 2.36 times more volatile than KBR INC 475. It trades about 0.2 of its potential returns per unit of risk. KBR INC 475 is currently generating about -0.29 per unit of risk. If you would invest  22,290  in JPMorgan Chase Co on August 30, 2024 and sell it today you would earn a total of  2,689  from holding JPMorgan Chase Co or generate 12.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy56.52%
ValuesDaily Returns

JPMorgan Chase Co  vs.  KBR INC 475

 Performance 
       Timeline  
JPMorgan Chase 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, JPMorgan Chase may actually be approaching a critical reversion point that can send shares even higher in December 2024.
KBR INC 475 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days KBR INC 475 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for KBR INC 475 investors.

JPMorgan Chase and 48242WAC0 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JPMorgan Chase and 48242WAC0

The main advantage of trading using opposite JPMorgan Chase and 48242WAC0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, 48242WAC0 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 48242WAC0 will offset losses from the drop in 48242WAC0's long position.
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The idea behind JPMorgan Chase Co and KBR INC 475 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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