Correlation Between JPMorgan Chase and Delta Air

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

Diversification Opportunities for JPMorgan Chase and Delta Air

0.95

Correlation Coefficient

JPMorgan Chase  Delta Air

Almost no diversification

The 3 months correlation between JPMorgan and Delta is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Delta Air go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Delta Air

Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 0.77 times more return on investment than Delta Air. However, JPMorgan Chase Co is 1.3 times less risky than Delta Air. It trades about 0.11 of its potential returns per unit of risk. Delta Air Lines is currently generating about -0.04 per unit of risk. If you would invest  487,213  in JPMorgan Chase Co on October 12, 2024 and sell it today you would earn a total of  10,307  from holding JPMorgan Chase Co or generate 2.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.0%
Values	Daily Returns

JPMorgan Chase Co  vs.  Delta Air Lines

JPMorgan Chase

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, JPMorgan Chase showed solid returns over the last few months and may actually be approaching a breakup point.

Delta Air Lines

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Delta Air showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Delta Air

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

The idea behind JPMorgan Chase Co and Delta Air Lines 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.