Correlation Between ING Group and JPMorgan Chase

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

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

Diversification Opportunities for ING Group and JPMorgan Chase

0.83

Correlation Coefficient

ING Group  JPMorgan Chase

Very poor diversification

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

Pair Corralation between ING Group and JPMorgan Chase

Considering the 90-day investment horizon ING Group NV is expected to under-perform the JPMorgan Chase. In addition to that, ING Group is 1.57 times more volatile than JPMorgan Chase Co. It trades about -0.18 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about -0.06 per unit of volatility. If you would invest  2,138  in JPMorgan Chase Co on September 3, 2024 and sell it today you would lose (71.00) from holding JPMorgan Chase Co or give up 3.32% of portfolio value over 90 days.

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

ING Group NV  vs.  JPMorgan Chase Co

ING Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ING Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

JPMorgan Chase

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Chase Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, JPMorgan Chase is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with ING Group and JPMorgan Chase

The main advantage of trading using opposite ING Group and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Group 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 ING Group NV 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.