Correlation Between JPMorgan Chase and IGM Financial
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and IGM Financial 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 IGM Financial 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 IGM Financial, you can compare the effects of market volatilities on JPMorgan Chase and IGM Financial 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 IGM Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and IGM Financial.
Diversification Opportunities for JPMorgan Chase and IGM Financial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPMorgan and IGM is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and IGM Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGM Financial 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 IGM Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGM Financial has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and IGM Financial go up and down completely randomly.
Pair Corralation between JPMorgan Chase and IGM Financial
Assuming the 90 days trading horizon JPMorgan Chase is expected to generate 1.15 times less return on investment than IGM Financial. In addition to that, JPMorgan Chase is 1.99 times more volatile than IGM Financial. It trades about 0.1 of its total potential returns per unit of risk. IGM Financial is currently generating about 0.23 per unit of volatility. If you would invest 4,002 in IGM Financial on September 24, 2024 and sell it today you would earn a total of 623.00 from holding IGM Financial or generate 15.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
JPMorgan Chase Co vs. IGM Financial
Performance |
Timeline |
JPMorgan Chase |
IGM Financial |
JPMorgan Chase and IGM Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JPMorgan Chase and IGM Financial
The main advantage of trading using opposite JPMorgan Chase and IGM Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, IGM Financial 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 IGM Financial will offset losses from the drop in IGM Financial's long position.JPMorgan Chase vs. Gatos Silver | JPMorgan Chase vs. Summa Silver Corp | JPMorgan Chase vs. SalesforceCom CDR | JPMorgan Chase vs. Metalero Mining Corp |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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