Correlation Between JPMorgan Chase and Grupo Nacional

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

Diversification Opportunities for JPMorgan Chase and Grupo Nacional

0.03

Correlation Coefficient

JPMorgan Chase  Grupo Nacional

Significant diversification

The 3 months correlation between JPMorgan and Grupo is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Grupo Nacional Provincial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Nacional Provincial 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 Grupo Nacional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Nacional Provincial has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Grupo Nacional go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Grupo Nacional

Assuming the 90 days trading horizon JPMorgan Chase is expected to generate 8.23 times less return on investment than Grupo Nacional. In addition to that, JPMorgan Chase is 1.38 times more volatile than Grupo Nacional Provincial. It trades about 0.01 of its total potential returns per unit of risk. Grupo Nacional Provincial is currently generating about 0.17 per unit of volatility. If you would invest  11,577  in Grupo Nacional Provincial on December 30, 2024 and sell it today you would earn a total of  1,423  from holding Grupo Nacional Provincial or generate 12.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

JPMorgan Chase Co  vs.  Grupo Nacional Provincial

JPMorgan Chase

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, JPMorgan Chase is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Grupo Nacional Provincial

Risk-Adjusted Performance

Good

Over the last 90 days Grupo Nacional Provincial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Grupo Nacional may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with JPMorgan Chase and Grupo Nacional

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

The idea behind JPMorgan Chase Co and Grupo Nacional Provincial 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.