Correlation Between JPMorgan Chase and American Funds
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and American Funds 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 JPMorgan Chase and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Chase Co and American Funds Developing, you can compare the effects of market volatilities on JPMorgan Chase and American Funds 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 JPMorgan Chase with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and American Funds.
Diversification Opportunities for JPMorgan Chase and American Funds
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and American Funds Developing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Developing and JPMorgan Chase 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 JPMorgan Chase Co are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Developing has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and American Funds go up and down completely randomly.
Pair Corralation between JPMorgan Chase and American Funds
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 2.1 times more return on investment than American Funds. However, JPMorgan Chase is 2.1 times more volatile than American Funds Developing. It trades about -0.01 of its potential returns per unit of risk. American Funds Developing is currently generating about -0.12 per unit of risk. If you would invest 19,459 in JPMorgan Chase Co on January 26, 2024 and sell it today you would lose (151.00) from holding JPMorgan Chase Co or give up 0.78% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
JPMorgan Chase Co vs. American Funds Developing
Performance |
Timeline |
JPMorgan Chase |
American Funds Developing |
JPMorgan Chase and American Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JPMorgan Chase and American Funds
The main advantage of trading using opposite JPMorgan Chase and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
American Funds vs. Heritage Fund Investor | American Funds vs. Real Estate Fund | American Funds vs. Global Growth Fund | American Funds vs. Utilities Fund Investor |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
CEOs Directory Screen CEOs from public companies around the world | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |