Correlation Between Banco Santander and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Banco Santander 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 Banco Santander and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander SA and JPMorgan Chase Co, you can compare the effects of market volatilities on Banco Santander 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 Banco Santander with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and JPMorgan Chase.
Diversification Opportunities for Banco Santander and JPMorgan Chase
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and JPMorgan is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Banco Santander 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 Banco Santander SA 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 Banco Santander i.e., Banco Santander and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Banco Santander and JPMorgan Chase
Considering the 90-day investment horizon Banco Santander is expected to generate 2.86 times less return on investment than JPMorgan Chase. In addition to that, Banco Santander is 1.0 times more volatile than JPMorgan Chase Co. It trades about 0.04 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.12 per unit of volatility. If you would invest 19,154 in JPMorgan Chase Co on September 12, 2024 and sell it today you would earn a total of 5,132 from holding JPMorgan Chase Co or generate 26.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Banco Santander SA vs. JPMorgan Chase Co
Performance |
| Timeline |
| Banco Santander SA |
| JPMorgan Chase |
Banco Santander and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and JPMorgan Chase
The main advantage of trading using opposite Banco Santander and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander 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.| Banco Santander vs. Barclays PLC ADR | Banco Santander vs. ING Group NV | Banco Santander vs. HSBC Holdings PLC | Banco Santander vs. Natwest Group PLC |
| JPMorgan Chase vs. Bank of America | JPMorgan Chase vs. Victory Integrity Smallmid Cap | JPMorgan Chase vs. Hilton Worldwide Holdings | JPMorgan Chase vs. NVIDIA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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