Correlation Between AGF Management and JPMorgan Chase

Can any of the company-specific risk be diversified away by investing in both AGF Management and JPMorgan Chase 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 AGF Management and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AGF Management Limited and JPMorgan Chase Co, you can compare the effects of market volatilities on AGF Management and JPMorgan Chase 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 AGF Management with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and JPMorgan Chase.

Diversification Opportunities for AGF Management and JPMorgan Chase

0.76

Correlation Coefficient

AGF Management  JPMorgan Chase

Poor diversification

The 3 months correlation between AGF and JPMorgan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and AGF Management 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 AGF Management Limited are associated (or correlated) with JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of AGF Management i.e., AGF Management and JPMorgan Chase go up and down completely randomly.

Pair Corralation between AGF Management and JPMorgan Chase

Assuming the 90 days trading horizon AGF Management is expected to generate 2.65 times less return on investment than JPMorgan Chase. But when comparing it to its historical volatility, AGF Management Limited is 1.24 times less risky than JPMorgan Chase. It trades about 0.06 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,808  in JPMorgan Chase Co on October 7, 2024 and sell it today you would earn a total of  423.00  from holding JPMorgan Chase Co or generate 15.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

AGF Management Limited  vs.  JPMorgan Chase Co

AGF Management

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AGF Management is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

JPMorgan Chase

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGF Management and JPMorgan Chase

The main advantage of trading using opposite AGF Management and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, JPMorgan Chase 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 JPMorgan Chase will offset losses from the drop in JPMorgan Chase's long position.

The idea behind AGF Management Limited and JPMorgan Chase Co 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.