Correlation Between JPMorgan Chase and Hoteles City

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

Diversification Opportunities for JPMorgan Chase and Hoteles City

-0.54

Correlation Coefficient

JPMorgan Chase  Hoteles City

Excellent diversification

The 3 months correlation between JPMorgan and Hoteles is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Hoteles City Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoteles City Express 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 Hoteles City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoteles City Express has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Hoteles City go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Hoteles City

Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 0.88 times more return on investment than Hoteles City. However, JPMorgan Chase Co is 1.13 times less risky than Hoteles City. It trades about 0.58 of its potential returns per unit of risk. Hoteles City Express is currently generating about -0.05 per unit of risk. If you would invest  475,163  in JPMorgan Chase Co on October 24, 2024 and sell it today you would earn a total of  63,537  from holding JPMorgan Chase Co or generate 13.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

JPMorgan Chase Co  vs.  Hoteles City Express

JPMorgan Chase

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 13 (%) 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.

Hoteles City Express

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hoteles City Express has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with JPMorgan Chase and Hoteles City

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

The idea behind JPMorgan Chase Co and Hoteles City Express 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.