Correlation Between JPMorgan Chase and VanEck Natural

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

Diversification Opportunities for JPMorgan Chase and VanEck Natural

-0.67

Correlation Coefficient

JPMorgan Chase  VanEck Natural

Excellent diversification

The 3 months correlation between JPMorgan and VanEck is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and VanEck Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Natural 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 VanEck Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Natural Resources has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and VanEck Natural go up and down completely randomly.

Pair Corralation between JPMorgan Chase and VanEck Natural

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 1.12 times more return on investment than VanEck Natural. However, JPMorgan Chase is 1.12 times more volatile than VanEck Natural Resources. It trades about -0.17 of its potential returns per unit of risk. VanEck Natural Resources is currently generating about -0.38 per unit of risk. If you would invest  24,309  in JPMorgan Chase Co on September 20, 2024 and sell it today you would lose (1,013) from holding JPMorgan Chase Co or give up 4.17% 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.  VanEck Natural Resources

JPMorgan Chase

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, JPMorgan Chase may actually be approaching a critical reversion point that can send shares even higher in January 2025.

VanEck Natural Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Natural Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with JPMorgan Chase and VanEck Natural

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

The idea behind JPMorgan Chase Co and VanEck Natural 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.