Correlation Between JPMorgan Chase and Small Cap
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Small Cap 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 Small Cap 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 Small Cap Special, you can compare the effects of market volatilities on JPMorgan Chase and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Small Cap.
Diversification Opportunities for JPMorgan Chase and Small Cap
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JPMorgan and Small is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Small Cap Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Special 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Special has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Small Cap go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Small Cap
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 1.02 times more return on investment than Small Cap. However, JPMorgan Chase is 1.02 times more volatile than Small Cap Special. It trades about 0.36 of its potential returns per unit of risk. Small Cap Special is currently generating about -0.07 per unit of risk. If you would invest 25,916 in JPMorgan Chase Co on November 18, 2024 and sell it today you would earn a total of 1,743 from holding JPMorgan Chase Co or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Small Cap Special
Performance |
| Timeline |
| JPMorgan Chase |
| Small Cap Special |
JPMorgan Chase and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Small Cap
The main advantage of trading using opposite JPMorgan Chase and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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