Correlation Between Eastern Bankshares and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Eastern Bankshares 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 Eastern Bankshares and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Bankshares and JPMorgan Chase Co, you can compare the effects of market volatilities on Eastern Bankshares 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 Eastern Bankshares with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Bankshares and JPMorgan Chase.
Diversification Opportunities for Eastern Bankshares and JPMorgan Chase
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastern and JPMorgan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Bankshares and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Eastern Bankshares 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 Eastern Bankshares 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 Eastern Bankshares i.e., Eastern Bankshares and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Eastern Bankshares and JPMorgan Chase
Considering the 90-day investment horizon Eastern Bankshares is expected to under-perform the JPMorgan Chase. In addition to that, Eastern Bankshares is 1.11 times more volatile than JPMorgan Chase Co. It trades about -0.01 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.03 per unit of volatility. If you would invest 23,809 in JPMorgan Chase Co on December 28, 2024 and sell it today you would earn a total of 476.00 from holding JPMorgan Chase Co or generate 2.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.36% |
Values | Daily Returns |
Eastern Bankshares vs. JPMorgan Chase Co
Performance |
Timeline |
Eastern Bankshares |
JPMorgan Chase |
Eastern Bankshares and JPMorgan Chase Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eastern Bankshares and JPMorgan Chase
The main advantage of trading using opposite Eastern Bankshares and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Bankshares 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.Eastern Bankshares vs. Western New England | Eastern Bankshares vs. Northeast Community Bancorp | Eastern Bankshares vs. Independent Bank | Eastern Bankshares vs. The First Bancshares, |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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