Correlation Between JPMorgan Chase and Energy Select
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Energy Select 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 Energy Select 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 Energy Select Sector, you can compare the effects of market volatilities on JPMorgan Chase and Energy Select 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 Energy Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Energy Select.
Diversification Opportunities for JPMorgan Chase and Energy Select
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between JPMorgan and Energy is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Energy Select Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Select Sector 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 Energy Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Select Sector has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Energy Select go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Energy Select
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.66 times more return on investment than Energy Select. However, JPMorgan Chase Co is 1.52 times less risky than Energy Select. It trades about 0.36 of its potential returns per unit of risk. Energy Select Sector is currently generating about -0.15 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Energy Select Sector
Performance |
| Timeline |
| JPMorgan Chase |
| Energy Select Sector |
JPMorgan Chase and Energy Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Energy Select
The main advantage of trading using opposite JPMorgan Chase and Energy Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Energy Select 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 Energy Select will offset losses from the drop in Energy Select's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
| Energy Select vs. Financial Select Sector | Energy Select vs. Health Care Select | Energy Select vs. Technology Select Sector | Energy Select vs. Utilities Select Sector |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| CEOs Directory Screen CEOs from public companies around the world |