Correlation Between JPMorgan Chase and Dimensional International

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

Diversification Opportunities for JPMorgan Chase and Dimensional International

-0.03

Correlation Coefficient

JPMorgan Chase  Dimensional International

Good diversification

The 3 months correlation between JPMorgan and Dimensional is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Dimensional International Valu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional International has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Dimensional International go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Dimensional International

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 4.45 times less return on investment than Dimensional International. In addition to that, JPMorgan Chase is 1.74 times more volatile than Dimensional International Value. It trades about 0.03 of its total potential returns per unit of risk. Dimensional International Value is currently generating about 0.22 per unit of volatility. If you would invest  3,529  in Dimensional International Value on December 30, 2024 and sell it today you would earn a total of  439.00  from holding Dimensional International Value or generate 12.44% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  Dimensional International Valu

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.

Dimensional International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional International Value are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain forward indicators, Dimensional International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with JPMorgan Chase and Dimensional International

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

The idea behind JPMorgan Chase Co and Dimensional International Value 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 Global Correlations module to find global opportunities by holding instruments from different markets.