Correlation Between JPMorgan Chase and First Interstate
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and First Interstate 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 First Interstate 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 First Interstate BancSystem, you can compare the effects of market volatilities on JPMorgan Chase and First Interstate 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 First Interstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and First Interstate.
Diversification Opportunities for JPMorgan Chase and First Interstate
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between JPMorgan and First is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and First Interstate BancSystem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Interstate Ban 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 First Interstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Interstate Ban has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and First Interstate go up and down completely randomly.
Pair Corralation between JPMorgan Chase and First Interstate
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.9 times more return on investment than First Interstate. However, JPMorgan Chase Co is 1.12 times less risky than First Interstate. It trades about -0.03 of its potential returns per unit of risk. First Interstate BancSystem is currently generating about -0.16 per unit of risk. If you would invest 26,730 in JPMorgan Chase Co on December 2, 2024 and sell it today you would lose (265.00) from holding JPMorgan Chase Co or give up 0.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
JPMorgan Chase Co vs. First Interstate BancSystem
Performance |
Timeline |
JPMorgan Chase |
First Interstate Ban |
JPMorgan Chase and First Interstate Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JPMorgan Chase and First Interstate
The main advantage of trading using opposite JPMorgan Chase and First Interstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, First Interstate 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 First Interstate will offset losses from the drop in First Interstate's long position.JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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