Correlation Between JPMorgan Chase and Inter Parfums

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

Diversification Opportunities for JPMorgan Chase and Inter Parfums

0.75

Correlation Coefficient

JPMorgan Chase  Inter Parfums

Poor diversification

The 3 months correlation between JPMorgan and Inter is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums 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 Inter Parfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Parfums has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Inter Parfums go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Inter Parfums

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 1.09 times less return on investment than Inter Parfums. In addition to that, JPMorgan Chase is 1.12 times more volatile than Inter Parfums. It trades about 0.15 of its total potential returns per unit of risk. Inter Parfums is currently generating about 0.18 per unit of volatility. If you would invest  11,505  in Inter Parfums on September 12, 2024 and sell it today you would earn a total of  2,338  from holding Inter Parfums or generate 20.32% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  Inter Parfums

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.

Inter Parfums

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Parfums are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Inter Parfums reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Inter Parfums

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

The idea behind JPMorgan Chase Co and Inter Parfums 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.