Correlation Between JPMorgan and USCF Midstream

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

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

Diversification Opportunities for JPMorgan and USCF Midstream

0.0

Correlation Coefficient

JPMorgan  USCF Midstream

Pay attention - limited upside

The 3 months correlation between JPMorgan and USCF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan and USCF Midstream Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF Midstream Energy and JPMorgan 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 are associated (or correlated) with USCF Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF Midstream Energy has no effect on the direction of JPMorgan i.e., JPMorgan and USCF Midstream go up and down completely randomly.

Pair Corralation between JPMorgan and USCF Midstream

If you would invest  4,887  in USCF Midstream Energy on December 27, 2024 and sell it today you would earn a total of  364.00  from holding USCF Midstream Energy or generate 7.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

JPMorgan  vs.  USCF Midstream Energy

JPMorgan

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady primary indicators, JPMorgan is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

USCF Midstream Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in USCF Midstream Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting primary indicators, USCF Midstream may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with JPMorgan and USCF Midstream

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

The idea behind JPMorgan and USCF Midstream Energy 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.