Correlation Between JPMorgan Chase and TREEHOUSE

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

Diversification Opportunities for JPMorgan Chase and TREEHOUSE

JPMorganTREEHOUSEDiversified AwayJPMorganTREEHOUSEDiversified Away100%
0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between JPMorgan and TREEHOUSE is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and TREEHOUSE FOODS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TREEHOUSE FOODS INC 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 TREEHOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TREEHOUSE FOODS INC has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and TREEHOUSE go up and down completely randomly.

Pair Corralation between JPMorgan Chase and TREEHOUSE

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.96 times more return on investment than TREEHOUSE. However, JPMorgan Chase Co is 1.04 times less risky than TREEHOUSE. It trades about 0.0 of its potential returns per unit of risk. TREEHOUSE FOODS INC is currently generating about -0.21 per unit of risk. If you would invest  26,484  in JPMorgan Chase Co on November 25, 2024 and sell it today you would lose (60.00) from holding JPMorgan Chase Co or give up 0.23% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

JPMorgan Chase Co  vs.  TREEHOUSE FOODS INC

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -5051015
JavaScript chart by amCharts 3.21.15JPM 89469AAD6
       Timeline  
JPMorgan Chase 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 6 (%) 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 March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb230240250260270280
TREEHOUSE FOODS INC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days TREEHOUSE FOODS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, TREEHOUSE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.158687888990919293

JPMorgan Chase and TREEHOUSE Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.7-2.77-1.84-0.91-0.01550.961.942.933.924.91 0.050.100.150.200.250.300.35
JavaScript chart by amCharts 3.21.15JPM 89469AAD6
       Returns  

Pair Trading with JPMorgan Chase and TREEHOUSE

The main advantage of trading using opposite JPMorgan Chase and TREEHOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, TREEHOUSE 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 TREEHOUSE will offset losses from the drop in TREEHOUSE's long position.
The idea behind JPMorgan Chase Co and TREEHOUSE FOODS INC 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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