Correlation Between China Construction and JPMorgan Chase

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both China Construction 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 China Construction and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Construction Bank and JPMorgan Chase Co, you can compare the effects of market volatilities on China Construction 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 China Construction with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and JPMorgan Chase.

Diversification Opportunities for China Construction and JPMorgan Chase

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between China and JPMorgan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and China Construction 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 China Construction Bank 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 China Construction i.e., China Construction and JPMorgan Chase go up and down completely randomly.

Pair Corralation between China Construction and JPMorgan Chase

Assuming the 90 days horizon China Construction is expected to generate 1.34 times less return on investment than JPMorgan Chase. In addition to that, China Construction is 1.4 times more volatile than JPMorgan Chase Co. It trades about 0.05 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.1 per unit of volatility. If you would invest  18,294  in JPMorgan Chase Co on September 23, 2024 and sell it today you would earn a total of  4,491  from holding JPMorgan Chase Co or generate 24.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

China Construction Bank  vs.  JPMorgan Chase Co

 Performance 
       Timeline  
China Construction Bank 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in China Construction Bank are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, China Construction reported solid returns over the last few months and may actually be approaching a breakup point.
JPMorgan Chase 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
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. Despite nearly fragile basic indicators, JPMorgan Chase reported solid returns over the last few months and may actually be approaching a breakup point.

China Construction and JPMorgan Chase Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with China Construction and JPMorgan Chase

The main advantage of trading using opposite China Construction and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction 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 China Construction Bank 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

Other Complementary Tools

Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities