Correlation Between Washington Federal and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Washington Federal 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 Washington Federal and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Federal and JPMorgan Chase Co, you can compare the effects of market volatilities on Washington Federal 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 Washington Federal with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Federal and JPMorgan Chase.
Diversification Opportunities for Washington Federal and JPMorgan Chase
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Washington and JPMorgan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Washington Federal 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 Washington Federal 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 Washington Federal i.e., Washington Federal and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Washington Federal and JPMorgan Chase
Given the investment horizon of 90 days Washington Federal is expected to under-perform the JPMorgan Chase. In addition to that, Washington Federal is 1.31 times more volatile than JPMorgan Chase Co. It trades about -0.17 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.08 per unit of volatility. If you would invest 23,929 in JPMorgan Chase Co on September 12, 2024 and sell it today you would earn a total of 357.00 from holding JPMorgan Chase Co or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Washington Federal vs. JPMorgan Chase Co
Performance |
| Timeline |
| Washington Federal |
| JPMorgan Chase |
Washington Federal and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Federal and JPMorgan Chase
The main advantage of trading using opposite Washington Federal and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Federal 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.| Washington Federal vs. JPMorgan Chase Co | Washington Federal vs. Citigroup | Washington Federal vs. Wells Fargo | Washington Federal vs. Toronto Dominion Bank |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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