Correlation Between JPMorgan Chase and TVA

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

Diversification Opportunities for JPMorgan Chase and TVA

-0.47

Correlation Coefficient

JPMorgan Chase  TVA

Very good diversification

The 3 months correlation between JPMorgan and TVA is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and TVA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TVA 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 TVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TVA Group has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and TVA go up and down completely randomly.

Pair Corralation between JPMorgan Chase and TVA

Assuming the 90 days trading horizon JPMorgan Chase Co is expected to under-perform the TVA. But the stock apears to be less risky and, when comparing its historical volatility, JPMorgan Chase Co is 2.32 times less risky than TVA. The stock trades about -0.02 of its potential returns per unit of risk. The TVA Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  90.00  in TVA Group on December 3, 2024 and sell it today you would earn a total of  3.00  from holding TVA Group or generate 3.33% 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.  TVA Group

JPMorgan Chase

Risk-Adjusted Performance

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 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

TVA Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TVA Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, TVA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with JPMorgan Chase and TVA

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

The idea behind JPMorgan Chase Co and TVA 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.