Correlation Between JPMorgan Chase and Rackla Metals

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

Diversification Opportunities for JPMorgan Chase and Rackla Metals

-0.18

Correlation Coefficient

JPMorgan Chase  Rackla Metals

Good diversification

The 3 months correlation between JPMorgan and Rackla is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Rackla Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rackla Metals 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 Rackla Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rackla Metals has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Rackla Metals go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Rackla Metals

Assuming the 90 days trading horizon JPMorgan Chase is expected to generate 44.39 times less return on investment than Rackla Metals. But when comparing it to its historical volatility, JPMorgan Chase Co is 4.71 times less risky than Rackla Metals. It trades about 0.02 of its potential returns per unit of risk. Rackla Metals is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Rackla Metals on December 30, 2024 and sell it today you would earn a total of  11.00  from holding Rackla Metals or generate 100.0% 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.  Rackla Metals

JPMorgan Chase

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, JPMorgan Chase is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Rackla Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rackla Metals are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Rackla Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Rackla Metals

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

The idea behind JPMorgan Chase Co and Rackla Metals 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.