Correlation Between European Residential and JPMorgan Chase

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

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

Diversification Opportunities for European Residential and JPMorgan Chase

0.77

Correlation Coefficient

European Residential  JPMorgan Chase

Poor diversification

The 3 months correlation between European and JPMorgan is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding European Residential Real and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and European Residential 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 European Residential Real 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 European Residential i.e., European Residential and JPMorgan Chase go up and down completely randomly.

Pair Corralation between European Residential and JPMorgan Chase

Assuming the 90 days trading horizon European Residential Real is expected to generate 1.25 times more return on investment than JPMorgan Chase. However, European Residential is 1.25 times more volatile than JPMorgan Chase Co. It trades about 0.12 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.12 per unit of risk. If you would invest  325.00  in European Residential Real on September 29, 2024 and sell it today you would earn a total of  57.00  from holding European Residential Real or generate 17.54% return on investment over 90 days.

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

European Residential Real  vs.  JPMorgan Chase Co

European Residential Real

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in European Residential Real are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, European Residential sustained solid returns over the last few months and may actually be approaching a breakup point.

JPMorgan Chase

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with European Residential and JPMorgan Chase

The main advantage of trading using opposite European Residential and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Residential 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 European Residential Real 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.