Correlation Between NSTS Bancorp and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both NSTS Bancorp 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 NSTS Bancorp and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NSTS Bancorp and JPMorgan Chase Co, you can compare the effects of market volatilities on NSTS Bancorp 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 NSTS Bancorp with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of NSTS Bancorp and JPMorgan Chase.
Diversification Opportunities for NSTS Bancorp and JPMorgan Chase
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NSTS and JPMorgan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding NSTS Bancorp and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and NSTS Bancorp 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 NSTS Bancorp 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 NSTS Bancorp i.e., NSTS Bancorp and JPMorgan Chase go up and down completely randomly.
Pair Corralation between NSTS Bancorp and JPMorgan Chase
Given the investment horizon of 90 days NSTS Bancorp is expected to generate 2.17 times less return on investment than JPMorgan Chase. But when comparing it to its historical volatility, NSTS Bancorp is 1.26 times less risky than JPMorgan Chase. It trades about 0.08 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 15,482 in JPMorgan Chase Co on September 3, 2024 and sell it today you would earn a total of 9,490 from holding JPMorgan Chase Co or generate 61.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NSTS Bancorp vs. JPMorgan Chase Co
Performance |
| Timeline |
| NSTS Bancorp |
| JPMorgan Chase |
NSTS Bancorp and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NSTS Bancorp and JPMorgan Chase
The main advantage of trading using opposite NSTS Bancorp and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NSTS Bancorp 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.| NSTS Bancorp vs. JPMorgan Chase Co | NSTS Bancorp vs. Citigroup | NSTS Bancorp vs. Wells Fargo | NSTS Bancorp vs. Toronto Dominion Bank |
| JPMorgan Chase vs. Partner Communications | JPMorgan Chase vs. Merck Company | JPMorgan Chase vs. Western Midstream Partners | JPMorgan Chase vs. Edgewise Therapeutics |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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