Correlation Between Fubon Financial and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Fubon Financial 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 Fubon Financial and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fubon Financial Holding and JPMorgan Chase Co, you can compare the effects of market volatilities on Fubon Financial 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 Fubon Financial with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and JPMorgan Chase.
Diversification Opportunities for Fubon Financial and JPMorgan Chase
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fubon and JPMorgan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Fubon Financial 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 Fubon Financial Holding 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 Fubon Financial i.e., Fubon Financial and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Fubon Financial and JPMorgan Chase
Assuming the 90 days trading horizon Fubon Financial Holding is expected to under-perform the JPMorgan Chase. But the stock apears to be less risky and, when comparing its historical volatility, Fubon Financial Holding is 1.32 times less risky than JPMorgan Chase. The stock trades about -0.01 of its potential returns per unit of risk. The JPMorgan Chase Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 18,292 in JPMorgan Chase Co on January 24, 2024 and sell it today you would earn a total of 649.00 from holding JPMorgan Chase Co or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.12% |
| Values | Daily Returns |
Fubon Financial Holding vs. JPMorgan Chase Co
Performance |
| Timeline |
| Fubon Financial Holding |
| JPMorgan Chase |
Fubon Financial and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and JPMorgan Chase
The main advantage of trading using opposite Fubon Financial and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial 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.| Fubon Financial vs. Kworld Computer Co | Fubon Financial vs. RiTdisplay Corp | Fubon Financial vs. Tai Tung Communication | Fubon Financial vs. Wistron Information Technology |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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