Correlation Between JPMorgan Chase and NFI

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

Diversification Opportunities for JPMorgan Chase and NFI

-0.86

Correlation Coefficient

JPMorgan Chase  NFI

Pay attention - limited upside

The 3 months correlation between JPMorgan and NFI is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and NFI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFI Group 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 NFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFI Group has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and NFI go up and down completely randomly.

Pair Corralation between JPMorgan Chase and NFI

Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 1.21 times more return on investment than NFI. However, JPMorgan Chase is 1.21 times more volatile than NFI Group. It trades about 0.11 of its potential returns per unit of risk. NFI Group is currently generating about -0.24 per unit of risk. If you would invest  2,922  in JPMorgan Chase Co on September 2, 2024 and sell it today you would earn a total of  422.00  from holding JPMorgan Chase Co or generate 14.44% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  NFI Group

JPMorgan Chase

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

NFI Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with JPMorgan Chase and NFI

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

The idea behind JPMorgan Chase Co and NFI Group 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.