Correlation Between JPMorgan Chase and Procter Gamble

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

Diversification Opportunities for JPMorgan Chase and Procter Gamble

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between JPMorgan and Procter is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble 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 Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Procter Gamble go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Procter Gamble

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 1.33 times more return on investment than Procter Gamble. However, JPMorgan Chase is 1.33 times more volatile than Procter Gamble. It trades about 0.07 of its potential returns per unit of risk. Procter Gamble is currently generating about 0.02 per unit of risk. If you would invest  12,657  in JPMorgan Chase Co on December 29, 2023 and sell it today you would earn a total of  7,295  from holding JPMorgan Chase Co or generate 57.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

JPMorgan Chase Co  vs.  Procter Gamble

 Performance 
       Timeline  
JPMorgan Chase 

Risk-Adjusted Performance

25 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.
Procter Gamble 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Procter Gamble are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, Procter Gamble may actually be approaching a critical reversion point that can send shares even higher in April 2024.

JPMorgan Chase and Procter Gamble Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JPMorgan Chase and Procter Gamble

The main advantage of trading using opposite JPMorgan Chase and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Procter Gamble 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 Procter Gamble will offset losses from the drop in Procter Gamble's long position.
The idea behind JPMorgan Chase Co and Procter Gamble 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

Other Complementary Tools

Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Stocks Directory
Find actively traded stocks across global markets
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk