Correlation Between JPMorgan Chase and Twitter

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

Diversification Opportunities for JPMorgan Chase and Twitter

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between JPMorgan and Twitter is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Twitter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twitter 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 Twitter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twitter has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Twitter go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Twitter

Considering the 90-day investment horizon JPMorgan Chase Co is expected to under-perform the Twitter. But the stock apears to be less risky and, when comparing its historical volatility, JPMorgan Chase Co is 2.03 times less risky than Twitter. The stock trades about -0.01 of its potential returns per unit of risk. The Twitter is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  5,839  in Twitter on October 29, 2022 and sell it today you would lose (469.00)  from holding Twitter or give up 8.03% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy81.87%
ValuesDaily Returns

JPMorgan Chase Co  vs.  Twitter

 Performance (%) 
       Timeline  
JPMorgan Chase 
JPMorgan Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, JPMorgan Chase may actually be approaching a critical reversion point that can send shares even higher in February 2023.

JPMorgan Price Channel

Twitter 
Twitter Performance
0 of 100
Over the last 90 days Twitter has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Twitter is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

JPMorgan Chase and Twitter Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JPMorgan Chase and Twitter

The main advantage of trading using opposite JPMorgan Chase and Twitter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Twitter 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 Twitter will offset losses from the drop in Twitter's long position.
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The idea behind JPMorgan Chase Co and Twitter 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.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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