Correlation Between JPMorgan Chase and Svenska Handelsbanken

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

Diversification Opportunities for JPMorgan Chase and Svenska Handelsbanken

0.72

Correlation Coefficient

JPMorgan Chase  Svenska Handelsbanken

Poor diversification

The 3 months correlation between JPMorgan and Svenska is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken 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 Svenska Handelsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Handelsbanken has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Svenska Handelsbanken go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Svenska Handelsbanken

Assuming the 90 days horizon JPMorgan Chase is expected to generate 1.01 times less return on investment than Svenska Handelsbanken. In addition to that, JPMorgan Chase is 1.21 times more volatile than Svenska Handelsbanken AB. It trades about 0.17 of its total potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about 0.2 per unit of volatility. If you would invest  1,131  in Svenska Handelsbanken AB on October 8, 2024 and sell it today you would earn a total of  257.00  from holding Svenska Handelsbanken AB or generate 22.72% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  Svenska Handelsbanken AB

JPMorgan Chase

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 13 (%) 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.

Svenska Handelsbanken

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Svenska Handelsbanken AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical indicators, Svenska Handelsbanken reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Svenska Handelsbanken

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

The idea behind JPMorgan Chase Co and Svenska Handelsbanken AB 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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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.