Correlation Between JPMorgan Chase and Clarke

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

Diversification Opportunities for JPMorgan Chase and Clarke

-0.45

Correlation Coefficient

JPMorgan Chase  Clarke

Very good diversification

The 3 months correlation between JPMorgan and Clarke is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Clarke Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarke Inc 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 Clarke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarke Inc has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Clarke go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Clarke

Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 2.31 times more return on investment than Clarke. However, JPMorgan Chase is 2.31 times more volatile than Clarke Inc. It trades about 0.1 of its potential returns per unit of risk. Clarke Inc is currently generating about -0.16 per unit of risk. If you would invest  3,261  in JPMorgan Chase Co on December 2, 2024 and sell it today you would earn a total of  243.00  from holding JPMorgan Chase Co or generate 7.45% 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.  Clarke Inc

JPMorgan Chase

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, JPMorgan Chase may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Clarke Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clarke Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Clarke is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with JPMorgan Chase and Clarke

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

The idea behind JPMorgan Chase Co and Clarke Inc 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.