Correlation Between JPMorgan Chase and Bancolombia
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Bancolombia 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 Bancolombia 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 Bancolombia SA ADR, you can compare the effects of market volatilities on JPMorgan Chase and Bancolombia 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 Bancolombia. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Bancolombia.
Diversification Opportunities for JPMorgan Chase and Bancolombia
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JPMorgan and Bancolombia is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Bancolombia SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancolombia SA ADR 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 Bancolombia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancolombia SA ADR has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Bancolombia go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Bancolombia
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.73 times more return on investment than Bancolombia. However, JPMorgan Chase Co is 1.36 times less risky than Bancolombia. It trades about 0.03 of its potential returns per unit of risk. Bancolombia SA ADR is currently generating about -0.33 per unit of risk. If you would invest 19,558 in JPMorgan Chase Co on March 21, 2024 and sell it today you would earn a total of 142.00 from holding JPMorgan Chase Co or generate 0.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
JPMorgan Chase Co vs. Bancolombia SA ADR
Performance |
Timeline |
JPMorgan Chase |
Bancolombia SA ADR |
JPMorgan Chase and Bancolombia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JPMorgan Chase and Bancolombia
The main advantage of trading using opposite JPMorgan Chase and Bancolombia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Bancolombia 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 Bancolombia will offset losses from the drop in Bancolombia's long position.JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Bank of Montreal |
Bancolombia vs. JPMorgan Chase Co | Bancolombia vs. Citigroup | Bancolombia vs. Wells Fargo | Bancolombia vs. Toronto Dominion Bank |
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.
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