Correlation Between JPMorgan Chase and Crane
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Crane 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 Crane 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 Crane Company, you can compare the effects of market volatilities on JPMorgan Chase and Crane 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 Crane. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Crane.
Diversification Opportunities for JPMorgan Chase and Crane
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and Crane is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Crane Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crane Company 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 Crane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crane Company has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Crane go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Crane
Considering the 90-day investment horizon JPMorgan Chase is expected to generate 1.13 times less return on investment than Crane. But when comparing it to its historical volatility, JPMorgan Chase Co is 2.11 times less risky than Crane. It trades about 0.41 of its potential returns per unit of risk. Crane Company is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 12,342 in Crane Company on December 30, 2023 and sell it today you would earn a total of 1,171 from holding Crane Company or generate 9.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
JPMorgan Chase Co vs. Crane Company
Performance |
Timeline |
JPMorgan Chase |
Crane Company |
JPMorgan Chase and Crane Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JPMorgan Chase and Crane
The main advantage of trading using opposite JPMorgan Chase and Crane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Crane 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 Crane will offset losses from the drop in Crane's long position.JPMorgan Chase vs. Walt Disney | JPMorgan Chase vs. General Electric | JPMorgan Chase vs. McDonalds | JPMorgan Chase vs. International Business Machines |
Crane vs. General Electric | Crane vs. Paul Mueller Co | Crane vs. Dupont De Nemours | Crane vs. American Express |
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.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |