Correlation Between NextSource Materials and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both NextSource Materials 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 NextSource Materials and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextSource Materials and JPMorgan Chase Co, you can compare the effects of market volatilities on NextSource Materials 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 NextSource Materials with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextSource Materials and JPMorgan Chase.
Diversification Opportunities for NextSource Materials and JPMorgan Chase
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between NextSource and JPMorgan is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding NextSource Materials and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and NextSource Materials 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 NextSource Materials 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 NextSource Materials i.e., NextSource Materials and JPMorgan Chase go up and down completely randomly.
Pair Corralation between NextSource Materials and JPMorgan Chase
Assuming the 90 days trading horizon NextSource Materials is expected to generate 4.22 times more return on investment than JPMorgan Chase. However, NextSource Materials is 4.22 times more volatile than JPMorgan Chase Co. It trades about 0.12 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.36 per unit of risk. If you would invest 80.00 in NextSource Materials on October 25, 2024 and sell it today you would earn a total of 8.00 from holding NextSource Materials or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NextSource Materials vs. JPMorgan Chase Co
Performance |
| Timeline |
| NextSource Materials |
| JPMorgan Chase |
NextSource Materials and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextSource Materials and JPMorgan Chase
The main advantage of trading using opposite NextSource Materials and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextSource Materials 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.| NextSource Materials vs. Leading Edge Materials | NextSource Materials vs. Northern Graphite | NextSource Materials vs. Lomiko Metals | NextSource Materials vs. Elcora Advanced Materials |
| JPMorgan Chase vs. Monument Mining Limited | JPMorgan Chase vs. Vizsla Silver Corp | JPMorgan Chase vs. Plaza Retail REIT | JPMorgan Chase vs. NextSource Materials |
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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