Correlation Between Parkland Fuel and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Parkland Fuel 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 Parkland Fuel and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parkland Fuel and JPMorgan Chase Co, you can compare the effects of market volatilities on Parkland Fuel 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 Parkland Fuel with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parkland Fuel and JPMorgan Chase.
Diversification Opportunities for Parkland Fuel and JPMorgan Chase
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Parkland and JPMorgan is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Parkland Fuel and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Parkland Fuel 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 Parkland Fuel 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 Parkland Fuel i.e., Parkland Fuel and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Parkland Fuel and JPMorgan Chase
Assuming the 90 days trading horizon Parkland Fuel is expected to generate 2.44 times more return on investment than JPMorgan Chase. However, Parkland Fuel is 2.44 times more volatile than JPMorgan Chase Co. It trades about 0.13 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about -0.06 per unit of risk. If you would invest 3,433 in Parkland Fuel on November 27, 2024 and sell it today you would earn a total of 284.00 from holding Parkland Fuel or generate 8.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parkland Fuel vs. JPMorgan Chase Co
Performance |
| Timeline |
| Parkland Fuel |
| JPMorgan Chase |
Parkland Fuel and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parkland Fuel and JPMorgan Chase
The main advantage of trading using opposite Parkland Fuel and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parkland Fuel 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.| Parkland Fuel vs. Keyera Corp | Parkland Fuel vs. Gibson Energy | Parkland Fuel vs. TFI International | Parkland Fuel vs. Pembina Pipeline Corp |
| JPMorgan Chase vs. Perseus Mining | JPMorgan Chase vs. Royal Road Minerals | JPMorgan Chase vs. Major Drilling Group | JPMorgan Chase vs. Pace Metals |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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