Correlation Between JPMorgan Chase and Dimensional ETF

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

Diversification Opportunities for JPMorgan Chase and Dimensional ETF

-0.72

Correlation Coefficient

JPMorgan Chase  Dimensional ETF

Pay attention - limited upside

The 3 months correlation between JPMorgan and Dimensional is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Dimensional ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional ETF Trust 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 Dimensional ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional ETF Trust has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Dimensional ETF go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Dimensional ETF

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 1.42 times more return on investment than Dimensional ETF. However, JPMorgan Chase is 1.42 times more volatile than Dimensional ETF Trust. It trades about 0.55 of its potential returns per unit of risk. Dimensional ETF Trust is currently generating about -0.07 per unit of risk. If you would invest  23,176  in JPMorgan Chase Co on October 20, 2024 and sell it today you would earn a total of  2,740  from holding JPMorgan Chase Co or generate 11.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

JPMorgan Chase Co  vs.  Dimensional ETF Trust

JPMorgan Chase

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 11 (%) 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.

Dimensional ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dimensional ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Dimensional ETF is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with JPMorgan Chase and Dimensional ETF

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

The idea behind JPMorgan Chase Co and Dimensional ETF Trust 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.