Correlation Between JPMorgan Chase and International Business

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and International Business 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 International Business 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 International Business Machines, you can compare the effects of market volatilities on JPMorgan Chase and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and International Business.

Diversification Opportunities for JPMorgan Chase and International Business

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between JPMorgan and International is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and International Business go up and down completely randomly.

Pair Corralation between JPMorgan Chase and International Business

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.69 times more return on investment than International Business. However, JPMorgan Chase Co is 1.45 times less risky than International Business. It trades about 0.41 of its potential returns per unit of risk. International Business Machines is currently generating about 0.11 per unit of risk. If you would invest  18,438  in JPMorgan Chase Co on December 30, 2023 and sell it today you would earn a total of  1,592  from holding JPMorgan Chase Co or generate 8.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

JPMorgan Chase Co  vs.  International Business Machine

 Performance 
       Timeline  
JPMorgan Chase 

Risk-Adjusted Performance

24 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.
International Business 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental drivers, International Business displayed solid returns over the last few months and may actually be approaching a breakup point.

JPMorgan Chase and International Business Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JPMorgan Chase and International Business

The main advantage of trading using opposite JPMorgan Chase and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.
The idea behind JPMorgan Chase Co and International Business Machines 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

Other Complementary Tools

Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Bonds Directory
Find actively traded corporate debentures issued by US companies
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device