Correlation Between Live Oak and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Live Oak 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 Live Oak and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Bancshares and JPMorgan Chase Co, you can compare the effects of market volatilities on Live Oak 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 Live Oak with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and JPMorgan Chase.
Diversification Opportunities for Live Oak and JPMorgan Chase
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Live and JPMorgan is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Bancshares and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Live Oak 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 Live Oak Bancshares 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 Live Oak i.e., Live Oak and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Live Oak and JPMorgan Chase
Considering the 90-day investment horizon Live Oak Bancshares is expected to generate 2.11 times more return on investment than JPMorgan Chase. However, Live Oak is 2.11 times more volatile than JPMorgan Chase Co. It trades about 0.07 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.14 per unit of risk. If you would invest 2,903 in Live Oak Bancshares on September 4, 2024 and sell it today you would earn a total of 1,804 from holding Live Oak Bancshares or generate 62.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Bancshares vs. JPMorgan Chase Co
Performance |
| Timeline |
| Live Oak Bancshares |
| JPMorgan Chase |
Live Oak and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and JPMorgan Chase
The main advantage of trading using opposite Live Oak and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak 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.| Live Oak vs. International Bancshares | Live Oak vs. Finward Bancorp | Live Oak vs. Aquagold International | Live Oak vs. Thrivent High Yield |
| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Aquagold International | JPMorgan Chase vs. Thrivent High Yield | JPMorgan Chase vs. Morningstar Unconstrained Allocation |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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