Correlation Between JPMorgan Chase and Intel

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

Diversification Opportunities for JPMorgan Chase and Intel

0.09

Correlation Coefficient

JPMorgan Chase  Intel

Significant diversification

The 3 months correlation between JPMorgan and Intel is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Intel go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Intel

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 8.51 times less return on investment than Intel. But when comparing it to its historical volatility, JPMorgan Chase Co is 2.8 times less risky than Intel. It trades about 0.03 of its potential returns per unit of risk. Intel is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,982  in Intel on December 29, 2024 and sell it today you would earn a total of  380.00  from holding Intel or generate 19.17% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  Intel

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

Intel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Intel

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

The idea behind JPMorgan Chase Co and Intel 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.