Correlation Between JPMorgan Chase and Procyon

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

Diversification Opportunities for JPMorgan Chase and Procyon

-0.33

Correlation Coefficient

JPMorgan Chase  Procyon

Very good diversification

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

Pair Corralation between JPMorgan Chase and Procyon

Considering the 90-day investment horizon JPMorgan Chase Co is expected to under-perform the Procyon. But the stock apears to be less risky and, when comparing its historical volatility, JPMorgan Chase Co is 2.96 times less risky than Procyon. The stock trades about -0.08 of its potential returns per unit of risk. The Procyon is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  20.00  in Procyon on October 4, 2024 and sell it today you would earn a total of  4.00  from holding Procyon or generate 20.0% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  Procyon

JPMorgan Chase

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 9 (%) 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.

Procyon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Procyon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Procyon 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 Procyon

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

The idea behind JPMorgan Chase Co and Procyon 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.