Correlation Between JPMorgan Chase and Bryn Resources

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

Diversification Opportunities for JPMorgan Chase and Bryn Resources

-0.7

Correlation Coefficient

JPMorgan Chase  Bryn Resources

Excellent diversification

The 3 months correlation between JPMorgan and Bryn is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Bryn Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bryn Resources 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 Bryn Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bryn Resources has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Bryn Resources go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Bryn Resources

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 15.86 times less return on investment than Bryn Resources. But when comparing it to its historical volatility, JPMorgan Chase Co is 34.05 times less risky than Bryn Resources. It trades about 0.1 of its potential returns per unit of risk. Bryn Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.88  in Bryn Resources on September 17, 2024 and sell it today you would lose (0.67) from holding Bryn Resources or give up 76.14% of portfolio value over 90 days.

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

JPMorgan Chase Co  vs.  Bryn Resources

JPMorgan Chase

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

Bryn Resources

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bryn Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bryn Resources displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Bryn Resources

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

The idea behind JPMorgan Chase Co and Bryn Resources 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.