Correlation Between SPDR DoubleLine and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine 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 SPDR DoubleLine and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR DoubleLine Short and JPMorgan Chase Co, you can compare the effects of market volatilities on SPDR DoubleLine 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 SPDR DoubleLine with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and JPMorgan Chase.
Diversification Opportunities for SPDR DoubleLine and JPMorgan Chase
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and JPMorgan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Short and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and SPDR DoubleLine 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 SPDR DoubleLine Short 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 SPDR DoubleLine i.e., SPDR DoubleLine and JPMorgan Chase go up and down completely randomly.
Pair Corralation between SPDR DoubleLine and JPMorgan Chase
Given the investment horizon of 90 days SPDR DoubleLine is expected to generate 5.47 times less return on investment than JPMorgan Chase. But when comparing it to its historical volatility, SPDR DoubleLine Short is 10.2 times less risky than JPMorgan Chase. It trades about 0.21 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 15,391 in JPMorgan Chase Co on January 24, 2024 and sell it today you would earn a total of 3,550 from holding JPMorgan Chase Co or generate 23.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR DoubleLine Short vs. JPMorgan Chase Co
Performance |
| Timeline |
| SPDR DoubleLine Short |
| JPMorgan Chase |
SPDR DoubleLine and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR DoubleLine and JPMorgan Chase
The main advantage of trading using opposite SPDR DoubleLine and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR DoubleLine 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.| SPDR DoubleLine vs. SPDR DoubleLine Emerging | SPDR DoubleLine vs. SPDR SSgA Ultra | SPDR DoubleLine vs. SPDR Bloomberg 1 10 | SPDR DoubleLine vs. SPDR DoubleLine Total |
| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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