Correlation Between Nicolet Bankshares and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Nicolet Bankshares 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 Nicolet Bankshares and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicolet Bankshares and JPMorgan Chase Co, you can compare the effects of market volatilities on Nicolet Bankshares 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 Nicolet Bankshares with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicolet Bankshares and JPMorgan Chase.
Diversification Opportunities for Nicolet Bankshares and JPMorgan Chase
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nicolet and JPMorgan is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Nicolet Bankshares and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Nicolet Bankshares 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 Nicolet Bankshares 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 Nicolet Bankshares i.e., Nicolet Bankshares and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Nicolet Bankshares and JPMorgan Chase
Considering the 90-day investment horizon Nicolet Bankshares is expected to generate 1.35 times more return on investment than JPMorgan Chase. However, Nicolet Bankshares is 1.35 times more volatile than JPMorgan Chase Co. It trades about 0.14 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.12 per unit of risk. If you would invest 7,822 in Nicolet Bankshares on September 13, 2024 and sell it today you would earn a total of 3,630 from holding Nicolet Bankshares or generate 46.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Nicolet Bankshares vs. JPMorgan Chase Co
Performance |
| Timeline |
| Nicolet Bankshares |
| JPMorgan Chase |
Nicolet Bankshares and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicolet Bankshares and JPMorgan Chase
The main advantage of trading using opposite Nicolet Bankshares and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicolet Bankshares 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.| Nicolet Bankshares vs. Old Second Bancorp | Nicolet Bankshares vs. Fidelity DD Bancorp | Nicolet Bankshares vs. BancFirst | Nicolet Bankshares vs. Affinity Bancshares |
| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Canadian Imperial Bank |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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