Correlation Between JPMorgan Chase and Helios Fairfax

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

Diversification Opportunities for JPMorgan Chase and Helios Fairfax

-0.14

Correlation Coefficient

JPMorgan Chase  Helios Fairfax

Good diversification

The 3 months correlation between JPMorgan and Helios is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Helios Fairfax Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Fairfax Partners 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 Helios Fairfax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Fairfax Partners has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Helios Fairfax go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Helios Fairfax

Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 0.19 times more return on investment than Helios Fairfax. However, JPMorgan Chase Co is 5.24 times less risky than Helios Fairfax. It trades about 0.02 of its potential returns per unit of risk. Helios Fairfax Partners is currently generating about -0.11 per unit of risk. If you would invest  3,176  in JPMorgan Chase Co on October 14, 2024 and sell it today you would earn a total of  8.00  from holding JPMorgan Chase Co or generate 0.25% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  Helios Fairfax Partners

JPMorgan Chase

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, JPMorgan Chase may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Helios Fairfax Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helios Fairfax Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with JPMorgan Chase and Helios Fairfax

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

The idea behind JPMorgan Chase Co and Helios Fairfax Partners 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.