Correlation Between JPMorgan Chase and Waste Connections

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

Diversification Opportunities for JPMorgan Chase and Waste Connections

0.24

Correlation Coefficient

JPMorgan Chase  Waste Connections

Modest diversification

The 3 months correlation between JPMorgan and Waste is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Waste Connections in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Connections 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 Waste Connections. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Connections has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Waste Connections go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Waste Connections

Assuming the 90 days trading horizon JPMorgan Chase is expected to generate 6.03 times less return on investment than Waste Connections. In addition to that, JPMorgan Chase is 1.56 times more volatile than Waste Connections. It trades about 0.02 of its total potential returns per unit of risk. Waste Connections is currently generating about 0.18 per unit of volatility. If you would invest  24,586  in Waste Connections on December 30, 2024 and sell it today you would earn a total of  3,013  from holding Waste Connections or generate 12.25% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  Waste Connections

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 current stock price disarray, may contribute to short-term losses for the investors.

Waste Connections

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Waste Connections are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Waste Connections may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with JPMorgan Chase and Waste Connections

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

The idea behind JPMorgan Chase Co and Waste Connections 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.