Correlation Between JPMorgan Chase and Value Grupo

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

Diversification Opportunities for JPMorgan Chase and Value Grupo

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between JPMorgan and Value is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Value Grupo Financiero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Grupo Financiero 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 Value Grupo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Grupo Financiero has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Value Grupo go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Value Grupo

Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 0.42 times more return on investment than Value Grupo. However, JPMorgan Chase Co is 2.35 times less risky than Value Grupo. It trades about 0.09 of its potential returns per unit of risk. Value Grupo Financiero is currently generating about 0.0 per unit of risk. If you would invest  248,726  in JPMorgan Chase Co on September 23, 2024 and sell it today you would earn a total of  229,774  from holding JPMorgan Chase Co or generate 92.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

JPMorgan Chase Co  vs.  Value Grupo Financiero

 Performance 
       Timeline  
JPMorgan Chase 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
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.
Value Grupo Financiero 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Value Grupo Financiero has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Value Grupo is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

JPMorgan Chase and Value Grupo Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JPMorgan Chase and Value Grupo

The main advantage of trading using opposite JPMorgan Chase and Value Grupo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Value Grupo 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 Value Grupo will offset losses from the drop in Value Grupo's long position.
The idea behind JPMorgan Chase Co and Value Grupo Financiero 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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