Correlation Between Agilent Technologies and JPMorgan Chase

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Can any of the company-specific risk be diversified away by investing in both Agilent Technologies 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 Agilent Technologies and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and JPMorgan Chase Co, you can compare the effects of market volatilities on Agilent Technologies 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 Agilent Technologies with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and JPMorgan Chase.

Diversification Opportunities for Agilent Technologies and JPMorgan Chase

0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Agilent and JPMorgan is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Agilent Technologies 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 Agilent Technologies 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 Agilent Technologies i.e., Agilent Technologies and JPMorgan Chase go up and down completely randomly.

Pair Corralation between Agilent Technologies and JPMorgan Chase

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 1.15 times less return on investment than JPMorgan Chase. In addition to that, Agilent Technologies is 1.44 times more volatile than JPMorgan Chase Co. It trades about 0.16 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.26 per unit of volatility. If you would invest  13,149  in JPMorgan Chase Co on October 29, 2022 and sell it today you would earn a total of  849.00  from holding JPMorgan Chase Co or generate 6.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Agilent Technologies  vs.  JPMorgan Chase Co

 Performance (%) 
       Timeline  
Agilent Technologies 
Agilent Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Agilent Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Agilent Price Channel

JPMorgan Chase 
JPMorgan Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, JPMorgan Chase may actually be approaching a critical reversion point that can send shares even higher in February 2023.

JPMorgan Price Channel

Agilent Technologies and JPMorgan Chase Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agilent Technologies and JPMorgan Chase

The main advantage of trading using opposite Agilent Technologies and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies 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.
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The idea behind Agilent Technologies and JPMorgan Chase Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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