Correlation Between Citizens Community and JPMorgan Chase

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

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

Diversification Opportunities for Citizens Community and JPMorgan Chase

0.83

Correlation Coefficient

Citizens Community  JPMorgan Chase

Very poor diversification

The 3 months correlation between Citizens and JPMorgan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Community Bancorp and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Citizens Community 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 Citizens Community Bancorp 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 Citizens Community i.e., Citizens Community and JPMorgan Chase go up and down completely randomly.

Pair Corralation between Citizens Community and JPMorgan Chase

Given the investment horizon of 90 days Citizens Community Bancorp is expected to generate 0.63 times more return on investment than JPMorgan Chase. However, Citizens Community Bancorp is 1.6 times less risky than JPMorgan Chase. It trades about 0.32 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.15 per unit of risk. If you would invest  1,338  in Citizens Community Bancorp on September 12, 2024 and sell it today you would earn a total of  349.00  from holding Citizens Community Bancorp or generate 26.08% return on investment over 90 days.

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

Citizens Community Bancorp  vs.  JPMorgan Chase Co

Citizens Community

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Community Bancorp are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Citizens Community demonstrated solid returns over the last few months and may actually be approaching a breakup point.

JPMorgan Chase

Risk-Adjusted Performance

11 of 100

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. In spite of very unsteady basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citizens Community and JPMorgan Chase

The main advantage of trading using opposite Citizens Community and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Community 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 Citizens Community Bancorp 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.