Correlation Between JPMorgan Chase and TeraGo

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

Diversification Opportunities for JPMorgan Chase and TeraGo

-0.78

Correlation Coefficient

JPMorgan Chase  TeraGo

Pay attention - limited upside

The 3 months correlation between JPMorgan and TeraGo is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and TeraGo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TeraGo Inc 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 TeraGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TeraGo Inc has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and TeraGo go up and down completely randomly.

Pair Corralation between JPMorgan Chase and TeraGo

Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 0.56 times more return on investment than TeraGo. However, JPMorgan Chase Co is 1.78 times less risky than TeraGo. It trades about 0.15 of its potential returns per unit of risk. TeraGo Inc is currently generating about -0.24 per unit of risk. If you would invest  2,985  in JPMorgan Chase Co on October 26, 2024 and sell it today you would earn a total of  540.00  from holding JPMorgan Chase Co or generate 18.09% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  TeraGo Inc

JPMorgan Chase

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

TeraGo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TeraGo Inc 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 basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with JPMorgan Chase and TeraGo

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

The idea behind JPMorgan Chase Co and TeraGo Inc 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.