Correlation Between JPMorgan Chase and Waterstone Financial
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Waterstone Financial 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 Waterstone Financial 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 Waterstone Financial, you can compare the effects of market volatilities on JPMorgan Chase and Waterstone Financial 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 Waterstone Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Waterstone Financial.
Diversification Opportunities for JPMorgan Chase and Waterstone Financial
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JPMorgan and Waterstone is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Waterstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waterstone Financial 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 Waterstone Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waterstone Financial has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Waterstone Financial go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Waterstone Financial
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.86 times more return on investment than Waterstone Financial. However, JPMorgan Chase Co is 1.16 times less risky than Waterstone Financial. It trades about 0.16 of its potential returns per unit of risk. Waterstone Financial is currently generating about 0.06 per unit of risk. If you would invest 19,371 in JPMorgan Chase Co on September 4, 2024 and sell it today you would earn a total of 5,254 from holding JPMorgan Chase Co or generate 27.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Waterstone Financial
Performance |
| Timeline |
| JPMorgan Chase |
| Waterstone Financial |
JPMorgan Chase and Waterstone Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Waterstone Financial
The main advantage of trading using opposite JPMorgan Chase and Waterstone Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Waterstone Financial 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 Waterstone Financial will offset losses from the drop in Waterstone Financial's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Aquagold International | JPMorgan Chase vs. Thrivent High Yield | JPMorgan Chase vs. Morningstar Unconstrained Allocation |
| Waterstone Financial vs. National Bank Holdings | Waterstone Financial vs. Community West Bancshares | Waterstone Financial vs. Financial Institutions | Waterstone Financial vs. Kearny Financial Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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