Correlation Between JPMorgan Chase and MFS Intermediate

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

Diversification Opportunities for JPMorgan Chase and MFS Intermediate

0.33

Correlation Coefficient

JPMorgan Chase  MFS Intermediate

Weak diversification

The 3 months correlation between JPMorgan and MFS is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and MFS Intermediate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Intermediate Income 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 MFS Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Intermediate Income has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and MFS Intermediate go up and down completely randomly.

Pair Corralation between JPMorgan Chase and MFS Intermediate

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 2.83 times more return on investment than MFS Intermediate. However, JPMorgan Chase is 2.83 times more volatile than MFS Intermediate Income. It trades about 0.06 of its potential returns per unit of risk. MFS Intermediate Income is currently generating about 0.12 per unit of risk. If you would invest  23,993  in JPMorgan Chase Co on December 27, 2024 and sell it today you would earn a total of  1,110  from holding JPMorgan Chase Co or generate 4.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

JPMorgan Chase Co  vs.  MFS Intermediate Income

JPMorgan Chase

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 4 (%) 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.

MFS Intermediate Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MFS Intermediate Income are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, MFS Intermediate is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with JPMorgan Chase and MFS Intermediate

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

The idea behind JPMorgan Chase Co and MFS Intermediate Income 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.