Correlation Between JPMorgan Chase and Absolute Health

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

Diversification Opportunities for JPMorgan Chase and Absolute Health

0.81

Correlation Coefficient

JPMorgan Chase  Absolute Health

Very poor diversification

The 3 months correlation between JPMorgan and Absolute is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Absolute Health and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Health 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 Absolute Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Health has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Absolute Health go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Absolute Health

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 322.42 times less return on investment than Absolute Health. But when comparing it to its historical volatility, JPMorgan Chase Co is 81.85 times less risky than Absolute Health. It trades about 0.03 of its potential returns per unit of risk. Absolute Health and is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Absolute Health and on December 29, 2024 and sell it today you would earn a total of  0.01  from holding Absolute Health and or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.31%
Values	Daily Returns

JPMorgan Chase Co  vs.  Absolute Health and

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 2 (%) 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 newest stock price disarray, may contribute to short-term losses for the investors.

Absolute Health

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Absolute Health and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Absolute Health demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Absolute Health

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

The idea behind JPMorgan Chase Co and Absolute Health and 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.