Correlation Between JPMorgan Chase and ProAm Explorations

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

Diversification Opportunities for JPMorgan Chase and ProAm Explorations

-0.51

Correlation Coefficient

JPMorgan Chase  ProAm Explorations

Excellent diversification

The 3 months correlation between JPMorgan and ProAm is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and ProAm Explorations Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProAm Explorations Corp 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 ProAm Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProAm Explorations Corp has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and ProAm Explorations go up and down completely randomly.

Pair Corralation between JPMorgan Chase and ProAm Explorations

Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 0.23 times more return on investment than ProAm Explorations. However, JPMorgan Chase Co is 4.39 times less risky than ProAm Explorations. It trades about 0.09 of its potential returns per unit of risk. ProAm Explorations Corp is currently generating about -0.06 per unit of risk. If you would invest  2,942  in JPMorgan Chase Co on October 11, 2024 and sell it today you would earn a total of  284.00  from holding JPMorgan Chase Co or generate 9.65% 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.  ProAm Explorations Corp

JPMorgan Chase

Risk-Adjusted Performance

7 of 100

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 unfluctuating basic indicators, JPMorgan Chase may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ProAm Explorations Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProAm Explorations Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with JPMorgan Chase and ProAm Explorations

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

The idea behind JPMorgan Chase Co and ProAm Explorations Corp 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..