Correlation Between Intel and JPMorgan Chase

Can any of the company-specific risk be diversified away by investing in both Intel 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 Intel and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intel and JPMorgan Chase Co, you can compare the effects of market volatilities on Intel 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 Intel with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and JPMorgan Chase.

Diversification Opportunities for Intel and JPMorgan Chase

-0.48

Correlation Coefficient

Intel  JPMorgan Chase

Very good diversification

The 3 months correlation between Intel and JPMorgan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Intel and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Intel 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 Intel 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 Intel i.e., Intel and JPMorgan Chase go up and down completely randomly.

Pair Corralation between Intel and JPMorgan Chase

Given the investment horizon of 90 days Intel is expected to generate 1.45 times less return on investment than JPMorgan Chase. In addition to that, Intel is 1.83 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 0.11 per unit of volatility. If you would invest  10,156  in JPMorgan Chase Co on January 19, 2024 and sell it today you would earn a total of  7,969  from holding JPMorgan Chase Co or generate 78.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Intel  vs.  JPMorgan Chase Co

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

JPMorgan Chase

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, JPMorgan Chase may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Intel and JPMorgan Chase

The main advantage of trading using opposite Intel and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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.

The idea behind Intel 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.

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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.