Correlation Between Kneat and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Kneat and JPMorgan Chase 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 Kneat and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kneat Inc and JPMorgan Chase Co, you can compare the effects of market volatilities on Kneat and JPMorgan Chase 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 Kneat with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kneat and JPMorgan Chase.
Diversification Opportunities for Kneat and JPMorgan Chase
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kneat and JPMorgan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kneat Inc and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Kneat 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 Kneat Inc are associated (or correlated) with JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of Kneat i.e., Kneat and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Kneat and JPMorgan Chase
Assuming the 90 days trading horizon Kneat is expected to generate 1.08 times less return on investment than JPMorgan Chase. But when comparing it to its historical volatility, Kneat Inc is 1.93 times less risky than JPMorgan Chase. It trades about 0.33 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,000 in JPMorgan Chase Co on August 28, 2024 and sell it today you would earn a total of 332.00 from holding JPMorgan Chase Co or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kneat Inc vs. JPMorgan Chase Co
Performance |
| Timeline |
| Kneat Inc |
| JPMorgan Chase |
Kneat and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kneat and JPMorgan Chase
The main advantage of trading using opposite Kneat and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kneat position performs unexpectedly, JPMorgan Chase 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 JPMorgan Chase will offset losses from the drop in JPMorgan Chase's long position.The idea behind Kneat Inc and JPMorgan Chase Co 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.| JPMorgan Chase vs. DelphX Capital Markets | JPMorgan Chase vs. Citadel Income | JPMorgan Chase vs. iShares Canadian HYBrid | JPMorgan Chase vs. Altagas Cum Red |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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