Correlation Between JPMorgan Chase and CanaQuest Medical

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

Diversification Opportunities for JPMorgan Chase and CanaQuest Medical

0.5

Correlation Coefficient

JPMorgan Chase  CanaQuest Medical

Very weak diversification

The 3 months correlation between JPMorgan and CanaQuest is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and CanaQuest Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanaQuest Medical Corp 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 CanaQuest Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanaQuest Medical Corp has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and CanaQuest Medical go up and down completely randomly.

Pair Corralation between JPMorgan Chase and CanaQuest Medical

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 61.14 times less return on investment than CanaQuest Medical. But when comparing it to its historical volatility, JPMorgan Chase Co is 17.55 times less risky than CanaQuest Medical. It trades about 0.03 of its potential returns per unit of risk. CanaQuest Medical Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2.00  in CanaQuest Medical Corp on December 30, 2024 and sell it today you would lose (0.12) from holding CanaQuest Medical Corp or give up 6.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

JPMorgan Chase Co  vs.  CanaQuest Medical Corp

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

CanaQuest Medical Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CanaQuest Medical Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CanaQuest Medical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and CanaQuest Medical

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

The idea behind JPMorgan Chase Co and CanaQuest Medical Corp 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.